Fund in crisis

Published 8:32 pm Friday, January 13, 2012

As the first legislative session of the year draws near in Alabama, some educators are worried about Gov. Robert Bentley’s new proposal for a constitutional amendment that would merge the state’s education fund with the General Fund.

Bentley announced his plan to work towards a merger of the two currently separate funds during a speech for the Birmingham Kiwanis Club last week, immediately sparking concerns that the move would hurt Alabama’s education system by redirecting funds now designated specifically for it to aid with cash strapped state services such as Medicaid and the prison system.

Both the General Fund and education budgets have been hit hard by proration and other cuts in recent years.

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In Escambia County, a school system in better-than-average fiscal shape, the combining of the two funds could still cause financial cuts and overall setbacks, according to Interim Superintendent Randall Little.

“Needless to say I hope it can be avoided,” Little said. “We don’t need to merge.”

Little said despite the passing of two tax bills in 2007 that benefit the public school system, the Board of Education is still working to get into a position to move forward instead of simply maintaining the status quo.

“Since 2009 (Escambia County’s budget) alone has already been reduced almost $6 million by the state,” Little said. “The proposed education budget for this fiscal year is $5.6 billion. They say if everything goes well we won’t have to face proration, but the reason we are not going to face proration is that $5.6 billion has already been cut out.”

Little said Escambia County is still in good shape, due largely in part to the passing of the tax bills, but added that if the merger caused more cuts that status could change.

“Fortunately the citizens of Escambia County are strong, ardent supporters of public education,” he said. “They renewed the bills a few years ago and helped put us in a sound fiscal position. But you’re looking at another major cut on top of a major proration. Every percentage point will cost us conservatively $250,000.”

State Rep. Alan Baker agrees the way to handle the shortcomings of the General Fund is not the merging of the two budgets.

“Governor Bentley and his staff are facing a $400 million short fall in the General Fund budget,” Baker, R-Brewton, said. “They’re exploring all options, however I’m opposed to consolidation of the General Fund and education budget as a single budget.”

Baker said he believes a consolidation of the two funds would not solve the current problems with the General Fund and would serve to shortchange education in the process.

“The state has not shown, past or present, a posture of over funding education,” he said. “The thing that I see is that this action would do nothing to increase the bottom line additional revenue needed by our state to fund education and the other state services.”

Little said, in Escambia County, the board is already facing the challenges of operating with a reduced staff that will eventually have to be replaced, which means more money being spent each month.

“In 2009 our payroll was almost $2.3 million,” he said. “Now it’s $1.9 million. Do we plan to replace those people down the line? Yes, but that will be more money per month.”

If Bentley’s plan to merge the two funds is successful, it would make Alabama the 48th state to operate using one large budget. Little said despite his opposition to the amendment, he is sympathetic toward the governor’s situation.

“The General Fund is important,” Little said. “That’s a tough decision. He’s caught between two economic black holes. The solution to it is not going to be an easy one.”

Despite a Legislature controlled by Republicans, Bentley will likely have a tough time passing the proposed change former governors George Wallace and Fob James once attempted, according to Baker.

“In talking with other legislators, I do not get the feeling that there will be sufficient momentum in the Legislature for such a consideration to consolidate the budget into one,” he said.

In the days following Bentley’s announcement, both Chairman of Finance and Taxation Education Sen. Trip Pittman, R-Baldwin, and Chairman of Ways and Means Education Rep. Jay Love, R-Montgomery, have publicly expressed opposition to the bill.