When Speaker Seth Hammett gavels the Alabama House of Representatives into session in three weeks, he will open what may be the most difficult legislative year he’s ever led.

“Budgets need to be the focus,” Hammett said. “We know we have a revenue shortfall and it’s going to be very difficult to develop budgets for state government and education.”

“Woefully short” are the words Hammett, who was in Montgomery for pre-session budget hearings last week, used to describe the budget outlook. The state is expected to be 30 percent short of what it needs to operate the non-education portions of state government at current levels, or $640 million short. The education budget is expected to be about one-half of 1 percent less than current funding, which is already prorated by 7.5 percent.

The session begins Tues., Jan. 12. The economic challenges the legislature faces will be compounded by the fact that 2010 is a legislative election year and most members are seeking re-election and don’t want to vote to cut spending.

“What we’re trying to determine is how we live without the revenue,” Hammett said. “This may be the most difficult session I’ve seen in 32 years (of serving in the legislature).”

With back-to-back years of prorated education budgets, many school systems have had to borrow money to operate and others have spent their savings, he said. Unless additional funds appear, “the answer may be layoffs unless the economy turns,” he said.

The issue is compounded by the fact that most agencies are seeking increases in funding.

“Corrections is looking for an additional $15 million,” he said, adding that the number of inmates continues to increase.

Hammett said he expects to see government accountability addressed in the House, including legislation on PAC-to PAC transfers, no-bid contracts and ethics laws for the executive branch of government.

The no-bid contract issue gained attention recently when it was revealed that the Riley administration awarded a $13 million unbid computer contract to Paragon Source, a company that has no listed phone number or Web site.

“Spending $13 million with a firm that has no telephone contact without taking bids is wrong,” Hammett said.

The argument for no-bid contracts is usually that no one else can do the work, he said.

“There is a software firm in Montgomery that is among the most advanced in the world,” he said. “We need to get no-bid contracts under control.”

Hammett said the House also will advance a plan to put Alabamians to work building roads.

“We recognize it is our responsibility to do something about jobs in Alabama,” he said.

One way Hammett and other Democrats in the legislature hope to do that is with a road-building program.

“This program would allocate $100 million for 10 years from the Alabama Trust Fund to be used to build new highways in our state,” he said, adding the program would create an estimated 28,000 jobs.

The Alabama Trust Fund is a state savings account that contains $2.6 billion in royalties that came from natural gas wells drilled along the state’s coast. Some of the earnings from the trust fund go toward the state budget each year.

Hammett said the legislature also hopes to do something to stimulate the housing industry in Alabama, but is still working out details of what legislation might be helpful.

The legislature also will encourage the executive branch to put together a plan for federal stimulus funds for energy conservation, which creates jobs and helps citizens with energy costs.

Alabama received $30 million from Congress last year, but only about $10 million has been allocated, he said.

“We’re getting another $30 million in 2010,” Hammett said. “The administration has been very slow developing guidelines for that money, which creates jobs and helps with energy bills.”

And the legislature also must address issues with the state’s education PACT (prepaid college tuition) program, he said. Last year, the PACT board suspended new contracts and revealed that assets can pay only a few more years of tuition.

“There’s a question of whether (the state has) a legal obligation to fulfill our promise, or a moral obligation to do so,” Hammett said.

Possible solutions include a state-imposed freeze on tuition rates for PACT recipients, as well as using monies from the Education Trust Fund or the Alabama Trust Fund to meet obligations.