'Tough pill to swallow"
Published 11:47 am Wednesday, July 29, 2009
Special report by Adam Prestridge &Kerry Whipple Bean
An increase in education cuts for the rest of the fiscal year is a “hard pill to swallow,” but local school officials said they will cope with the latest round of proration.
Gov. Bob Riley on Friday announced the level of proration will go up to 11 percent for the rest of the budget year, which ends Sept. 30.
The governor blamed a decline in state tax revenues earmarked for education. Those revenues have declined 10 percent since Riley first declared proration in December.
Friday also marked the third time Riley has released funds from the Rainy Day Trust Fund to lessen proration’s impact. He released $221 million in December, $100 million earlier this month and the remaining $116 million Friday.
Escambia County Schools Superintendent Billy Hines called the additional proration a “shock.”
The increase in proration dips into the county school system’s pockets to the tune of $534,000, according to Chief School Finance Officer Julie Madden. That equals $267,000 per 1 percent increase.
The cut effects the county’s foundation allocation, state money for teachers and support personnel, which is paid each month. Hines said he is unsure if the total will be taken out gradually over the course of the next two or three months or as one lump sum.
Although Riley’s decision was a blow to the county’s budget, Hines said the money lost will be made up with local funds.
As of Thursday afternoon’s board meeting, the county had $9.9 million in its account.
For Brewton City Schools, each percentage point of proration is about $55,000. Superintendent Lynn Smith could not be reached for comment Friday afternoon, but earlier in the week he said he knew schools would be facing tough cuts — not only in the current fiscal year but in the upcoming budget.
State Superintendent Joe Morton told superintendents in a memo Friday that the 11 percent proration is not set in stone because final proration figures will be released at the end of September with the final tax receipt numbers.
Morton’s memo said superintendents could likely expect about 6 percent proration in the upcoming fiscal year 2010 budget, and he encouraged school systems to plan ahead.
In their regular session this year, lawmakers did not make massive cuts as predicted in the state education budget because they used federal stimulus funds to make up some of the deficit.
But Riley and many lawmakers have predicted a tougher process next year as the Legislature looks to overcome the shortfall in revenue.
Riley said Friday that lawmakers need to look at controlling the costs of health care and retirement benefits for educational employees before cutting funding for education programs such as the Alabama Reading Initiative and the Alabama Math, Science and Technology Initiative.
In 2009, health insurance costs for education workers were more than $1.135 billion — an increase of 72 percent since 2003 when the state paid $660 million. Retirement benefit costs for education employees have also increased significantly, from $977 million in 2003 to more than $1.6 billion in 2009 — an increase of 65 percent.