For the second straight month, state can’t meet payroll
Published 2:16 pm Friday, November 21, 2008
For the second consecutive month, the Butler County School System will have to tap into reserve funds to pay its employees said Superintendent Mike Looney.
The district borrowed $500,000 from itself to meet payroll in October. The state did not reimburse those funds to local school systems until Nov. 7, according to the Mobile Press-Register.
State Superintendent Joe Morton notified school districts by letter this week that the state would be late in disbursing funds. Morton did not know what percentage in funds would be available, but that borrowed by the board in October represented a 25 percent shortfall.
The October delay was based on low tax receipts, said Morton, which has carried over into November.
Looney said he expected Gov. Bob Riley to declare proration sometimes after the first of the calendar year. Should Riley do so the state will then be able to borrow up to $457 million from the Rainy Day Account to help fund education thanks to voter-approved Amendment 1.
Those funds must be paid back in six years.
By law the governor must declare proration in order to avoid budget deficits, which are unconstitutional in Alabama.