Increase in proration will be felt at local level
As anticipated, dwindling tax revenues due to the recession have forced the hand of Governor Riley. On Friday, Riley declared a two percent increase in the level of proration in the Education Trust Fund for the 2009 fiscal year, ending September 30.
“No one is pleased that the economic situation requires further reductions in education, but they must be made in order for Alabama to meet its obligation to taxpayers to have a balanced budget,” Riley said in a press release on Friday.
With the increase, the level of proration now stands at 11 percent. Proration is the process of cutting appropriations when revenues fall short of projections.
Butler County School Superintendent Mike Looney had already warned his board members such an increase was likely.
“Obviously, this was not news we were hoping for, but it was something we were anticipating,” he said Friday.
The superintendent said the system would “try to conserve as much of the current money as we can.”
“What we can’t cover, we will dig into our reserves to pay. And that is never a good practice,” Looney said.
Looney advised the board at its July meeting all anticipated spending should be carefully weighed in the coming weeks.
“We still have some difficult days ahead of us, that’s for certain,” he said.
The governor first declared proration last December, releasing $221 million from the education Rainy Day Fund. Earlier this month, Riley released an additional $100 million from the Rainy Day Fund. This latest release of $116 million will deplete the fund.
The governor urged lawmakers to keep school initiatives such as the Alabama Reading Initiative, ACCESS Distance Learning and the state’s First Class Pre-K program a priority even in difficult times, due to the positive results they have yielded.
Riley suggested legislators look instead into controlling education workers’ health care and pension costs, which have increased by 65 percent – from $977 million to $1.6 billion – since 2003.