Alabama schools headed for proration
Published 12:00 am Wednesday, January 31, 2001
The slowing economy and an error from the franchise tax solution could spell financial troubles for the Butler County School System as well as public school systems statewide.
The recent downturn in the economy directly effects the amount of revenue that goes into the state's Education Trust Fund.
The State Board of Education's (BOE) prediction, last year, of a 4.5 percent growth rate by the end of 2000 has fallen short, showing a 1.99 percent decrease in the first quarter alone.
Butler County Superintendent of Schools Dr. Mike Reed said for each percentage of Proration declared by Gov. Siegelman, the county's school system will lose $63,000 from
The main cause of the error is the fact that there are some companies that won't be subject to an increase in the corporate income tax, from 5 percent to 6.5 percent, because they operate on a fiscal year rather than the calendar year.
Some companies won't begin their next fiscal year until July 1 or Oct. 1 of this year.
This error in projections adds to the risk already put on the $4.3 billion education budget for this year because collection of school taxes during October, November and December
of 2000 was 2 percent short of predictions. Proration would call for across-the-board cuts for state agencies and departments.
Salaries and benefits cannot be cut, by state law.
Alabama Governor Don Siegelman is warning public school systems not to fill any vacant positions and to cancel all travel plans that are not necessary.
"We have already delayed or canceled most field trips, except the ones federally funded or already paid for," says Reed.
"Book buying has also been put on hold till we can evaluate the situation."
Reed says that jobs are protected by contract and cannot be cut until after the school year.
However, Reed reports, no plans have been made to cut any jobs yet.
"We ask all parents to be understanding and work with us.
Unfortunately, proration is usually a two to three year cycle.
We may face this again next year,"