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2011 February 21 - 12:00 am

MONEY TREE: Ala. Gov. Looks at Impact of Future School Budget Cuts

MONTGOMERY, Ala. (AP) — Education officials are worried that tougher times lay ahead because Alabama’s new governor is asking how their schools and colleges would be hit by a 3 percent budget cut this year and an additional 10 percent drop in funding next year.

For non-education agencies, the prospects are even more bleak. Gov. Robert Bentley wants them to calculate the effects of a 15 percent reduction in their current budget and an additional 20 percent drop in funding next year.

Alabama’s superintendent of education, Joe Morton, and the two-year college chancellor, Freida Hill, said they are beginning to gather the information after receiving letters from Bentley’s finance director.

Morton said most school systems have been trying to save money in anticipation of a small cut this year, but a 10 percent drop for the 2011-12 school year “would be devastating.”

He said public schools in Alabama have shown steady improvements in recent years, including climbing from 31st to 25th among the states in the latest Quality Counts rankings from Education Week magazine. But he said more cuts will put the improvements at risk.

“Momentum is a rapidly fleeting thing,” he told the State Board of Education.

Bentley is president of the Board of Education, which oversees public schools and two-year colleges. He recently attended his first board meeting as governor, but had to leave after about 15 minutes to attend another meeting.

Bentley told the board that Alabama’s economy is showing signs of improvement, including an unemployment rate that has declined from 10.9 percent a year ago to 9.1 percent. But he said it must keep improving to avoid across-the-board cuts.

“It’s going to be very close,” Bentley said after the meeting. He said he has no timetable for deciding about trimming the budget.

Bentley said it’s more likely he will have to make significant cuts in the General Fund budget, which finances non-education agencies including state troopers, prisons, courts and social services. He said the taxes that finance the General Fund budget are not the kind that respond quickly to improvements in the economy, such as property taxes.

Alabama’s Constitution prohibits deficit spending, and the governor has to order across-the-board cuts when the state’s revenue falls below appropriations. The cuts are known as proration.

The Legislature’s top fiscal expert, Joyce Bigbee, estimated last month that the governor may have to prorate the $5.5 billion school budget 2.3 percent and the $1.68 billion General Fund budget about 8.5 percent.

Morton said the numbers under consideration for this year are smaller than the 9.5 percent cut last year and 11 percent cut the prior year. Those occurred when the recession caused tax collections to fall below expectations.

The economy is not the only reason that Bentley is looking at the possibility of a 10 percent cut in appropriations next year. Federal stimulus funds that Alabama has used the last two years won’t be available, education officials said. Bentley’s predecessor, Bob Riley, recently suggested the state look at temporarily increasing the number of students per teacher and delaying school bus purchases.

Morton said there are two big unknowns that will determine whether the budget situation gets better or worse, and they both stem from the BP oil spill.

One is whether BP will pay Alabama $148 million in school taxes that the state claims it lost when the spill caused tourism to plunge on beaches last summer. That would be enough to wipe out the cuts forecast by the Legislature’s budget expert.

The other big unknown is whether tourists will return in the usual numbers this summer and pump tax revenue into the state. If the tourists return, Alabama’s budget outlook will be much brighter, Morton said.

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