Proposed Medicaid cuts could hurt the State of Alabama

Proposed Medicaid cuts could hurt the State of Alabama

MONTGOMERY, AL (WSFA) - According to one economist, Alabama's General Fund Budget could spell trouble down the road financially.

"Every action of the government will have intended consequences and unintended consequences," said Kevin Deravi, economist at AUM.

The unintended consequences of an $85 million medicaid shortfall could be drastic, as it impacts the ability of people to stay healthy, and draw in business.

"A healthy, educated citizen is an asset; the poor, sick citizen is not an economic resource," Deravi said.

Without a good workforce, it hurt's the state's ability to attract new business.

"No one wants to be associated with a state that doesn't take care of it's needy people," Deravi said.

Without new industry that means less jobs, which means the state collects less taxes; compounding on the state's funding problem. So even at the current level of funding, Deravi has doubts if Alabama could survive.

The problem seems to be funding once again, but where additional money would come from seems to be up in the air.

This session, a lottery looks to be dead, and so does a transfer from the education budget. The other option could be taxes, a hard sell according to Deravi.

"Meaning that I will spend my money on what is good for me. The government would use my money on what is good for us. It's me vs us," Deravi said.

Copyright 2016 WSFA 12 News. All rights reserved.