On the Court

Drayton Nabers was appointed by Governor Bob Riley to the office of Chief Justice of the Alabama Supreme Court last week. That vacancy was created by the removal of Chief Justice Roy Moore for refusing to obey a federal court order to remove his Ten Commandments monument from the Supreme Court building. Nabers came out of retirement to serve as Director of Finance for the last 18 months. Prior to his retirement, he was CEO and Chairman of the Board of Protective Life Corporation. He practiced law in Birmingham prior to joining Protective. Nabers is a graduate of Princeton and Yale Law School and clerked with Justice Hugo Black.

There are three seats on the state Supreme Court up for election in November. Justice Gorman Houston, a Republican, and Justice Douglas Johnstone, the lone Democrat on the Court, are retiring. Justice Jean Brown was defeated in the Republican primary by Tom Parker, a Roy Moore protégé funded by Alabama trial lawyers.

Vying for the other two Court seats are Republican Judge Patti Smith who faces Roger Monroe and Republican Judge Mike Bolin who faces John Rochester in November. Both Patti Smith and Mike Bolin have the backing of the Alabama Civil Justice Reform Coalition and most business groups. Tom Parker faces Robert Smith in November.

In the Riley Administration

Tuesday Governor Riley announced the appointment of Jim Main as the state's Director of Finance. Main is a former partner in the Beasley, Allen plaintiff firm and a former chief of staff to Governor Fob James. He has most recently served as special counsel to Governor Riley. Main will be the chief financial officer of the state and responsible for drafting budgets to be presented to the Legislature. His biggest challenge is expected to be grappling with the rising cost of Medicaid and employee benefits. He is filling a vacancy created by the resignation of Drayton Nabers.

Main is expected to bring several veterans of state government in to serve as his deputies. Among his deputies are expected to be Andy Hornsby, former state Commissioner of Human Resources, Richard Cater, former state Commissioner of Insurance and Jim Solomon, a veteran of the Finance Department and Attorney General's Office.

There have been a number of other staff changes in the Riley Administration including the departure of Senior Advisor Dalton Smith last week. In recent months key Finance staffers, Stephanie McCullough and David Perry resigned. All three left to pursue personal goals.

The Governor appointed Ken Wallis as Legal Advisor in March to replace Troy King who Riley named Attorney General after the resignation of Attorney General Bill Pryor. Pryor now sits on the U.S. Circuit Court of Appeals.

Also in March, Riley appointed Robin Stone as his Director of Legislative Affairs. Stone previously worked in governmental relations with Boeing Company and the Business Council of Alabama.

Riley has also appointed Tom Surtees Commissioner of Revenue. Surtees came from Citation Corporation and replaced Dwight Carlisle who left Revenue to take a seat on the Auburn Board of Trustees.

In the Legislature

Representative John Hawkins, a Republican from Vestavia Hills passed away last week. Hawkins had a long career in both the House and Senate serving 28 years under nine governors. A special election will be scheduled to fill his unexpired term. Hawkins served on the House Government Finance and Appropriations Committee and the Commerce Committee. Speaker Seth Hammett will fill those vacancies from among the Republican House members.

Accountability and Finance

Special Session

Governor Riley has indicated that he plans to call a special legislative session prior to February to deal with accountability issues. He indicated that it will be after the Democratic and Republican national conventions which conclude by early September. He is reportedly traveling to South America in mid-September.

Riley has stated that health care cost containment will be at the top of the call and is waiting on recommendations from several interim committees studying health care costs. He is also considering reintroducing some of his failed accountability package from the 2004 Regular Legislative Session.

Interim Committees

Several important interim committees are meeting on accountability issues. The Governor's Task Force on Health Care Costs is looking for solutions to help contain the rising costs of state employee and teacher health care benefits. The task force is chaired by John McMahon, President Pro Tem of the University of Alabama System Board of Trustees. The Task force has not met since May and is waiting for actuarial analysis before meeting again soon.

The Legislature has established a 54 member interim committee composed of public and private sector representatives from across the health care spectrum. The committee is charged with developing recommendations to decrease the cost of health care, increase access to health care, and improve quality for Alabama citizens and businesses.

A subcommittee of the Education Finance and Appropriations Committee is also focusing on the rising expense of health care in state government.

State Finances

When the Legislature returns for the 2005 Session, crafting a 2006 budget will be a daunting task. With numerous one time sources of revenue in the '05 budget, an estimated $150 million increase in Medicaid costs in '06, and another $20 million in employee benefits in '06, the General Fund will need an additional $266 million in growth to level fund agencies.

The Education Budget is expected to see significant revenue growth as the economy continues to grow. The General Fund Budget does not respond to economic growth in the same manner as the Education Budget because the Education Budget is based largely on income and sales taxes.