staton inmates in dorm horizontal julie bennett sept 2013.JPG

Inmates in a dormitory at Staton Correctional Facility Wednesday, Sept. 4, 2013, in Elmore, Ala. The prison system is one of the state General Fund's biggest expenses and nearly impossible to cut. State lawmakers will have to address a bleak budget picture next year. (Julie Bennett/jbennett@al.com)

If Alabama lawmakers appear cagey when it comes to how they plan to balance the budget next year, it is likely because they do not yet know.

The hole is large and the opportunities for easy fixes are gone.

Including federal funds and taxes and fees dedicated for specific purposes, the state of Alabama will spend about $29 billion this year. But only a tiny sliver of that amount - about $1.8 billion - is for non-education programs that come under the discretion of the Legislature.

In reality, the state has not had enough money to cover its bills in the so-called General Fund for years. But it has managed to paper over those problems with a series gimmicks and luck.

"We just keep plugging the dam with chewing gum," said Richard Laird, a former state representative who left office this month.

In past years, federal stimulus funds plugged holes. But the temporary stimulus funding has dried up. The state also borrowed - with the approval of voters - $437.8 million from a trust fund filled with oil and gas royalties. But that, too, has been exhausted.

And, the state has managed to tap other non-recurring revenue sources, such as proceeds from lawsuits. But elected officials and budget experts agree those funds, too, will not be available.

"We don't project any one-time fix money," said state Sen Phil Williams, an Etowah County Republican who chairs the Fiscal Responsibility and Accountability Committee. "There seems to be something that always falls into place."

With politically palatable spending trims already made, that leaves unpopular cuts or tax increases. The issue is likely to dominate the next legislative session, which starts in March. Here is a look at why the problems are so vexing.

What the General Fund pays for

The General Fund has two large expenses that consume most of the money, and for a variety of reasons, are difficult to impossible to cut - Medicaid and the prison system.

Medicaid this year will cost the General Fund a little more than $685 million, while the Department of Corrections is a little more than $394 million. Together, they account for almost 59 percent of the entire budget.

As expensive as they are, Alabama already runs both on the cheap. It has one of the least-generous Medicaid programs in the country, and crams so many prisoners into its prisons, that its per-inmate cost is at the bottom of the nation.

"We've got the cheapest corrections program on the country," said Carol Gundlach, a budget analyst with the anti-poverty group Arise Citizens' Policy Project.

Not only significant savings probably impossible in the short run, in the long run, the state has struggled even to keep them in check. The prison budget has grown 49 percent since 2010.

The cost curve on Medicaid has been even more dramatic. General Fund payments to the Alabama Medicaid Agency have more than doubled just since 2010, when they were $315 million.

"The General Fund has become the health care fund," said state Sen. Trip Pittman, R-Montrose.

With Medicaid and corrections off the table, that does not leave much left to cut. The next biggest item in the General Fund budget is the court system, which gets more than $112.9 million from the General Fund. Lawmakers have tried over the years to reduce taxpayer support for the courts and shift funding to court fines and fees.

But that has brought stiff push-back from court officials who complain the Legislature is treating the judiciary as just another government agency rather than a co-equal branch of government.

The Department of Mental Health ($105 million) and the Department of Public Health ($81 million) round out the top five.

Other agencies getting significant amounts of General Fund money include departments that patrol the highways, serve senior citizens and safeguard the environment.

No more borrowing

As if it would not be hard enough to figure out how to get by without the $145.8 million that the state has been using from the Alabama Trust Fund, now lawmakers have to pay it back. The installment for fiscal year 2016 will be $15 million.

The state created the trust fund in 1985. Built with royalties paid by energy companies to extract natural resources from state lands and waters, the nest egg currently has about $2.8 billion. Interest from that money is used to fund state and local government. In the current fiscal year, interest from the fund - including the borrowed money - is the second-biggest source of revenue for the General Fund.

Borrowing the money was controversial, because any money taken out of the account - just like any money borrowed from a person's 401(k) account - cuts the principal and reduces the interest available in future years.

After voters blessed the borrowing in a 2012 referendum, the Legislature passed a law mandating the repayment schedule.

That means the gap caused just from the reversal of funds between the trust fund and the General Fund is about $160 million. State Sen. Arthur Orr, a Decatur Republican who chairs the Senate

General Fund budget committee, estimates that there is another $40 million in the loss of one-time expenses.

That puts the total shortfall facing lawmakers at $200 million - or about 11 percent of the General Fund. And that does not even factor in increases that prisons, Medicaid and other agencies might demand.

Other estimates put the shortfall as high as $265 million. And Gov. Robert Bentley said last week that the long-term deficit over the next several years is more like $700 million.

Katherine Robertson, a budget analyst for the conservative Alabama Policy Institute, said this year's budget challenge comes on top of fairly significant cuts that lawmakers have imposed in the years following the 2008 recession.

"In the past three to four years, they've cut just about everything that is low-hanging fruit. ... If there's anything easier out there, it's already been done," she said. "I don't envy the position they're in."