A Recap of the State Board Of Education's
September 2007 Work Session

Pouncey: State Board Faces Tough Education Budget Decisions

Alabama faces a tight budget year for education in 2008, the state Board of Education was told during its monthly K-12 work session Thursday at Muscle Shoals High School in north Alabama.

The state’s economy is slowing. The ’07 fiscal year that ends Sept. 30 is expected to yield an estimated $5.8 billion in revenue, but the Legislature allocated $6.7 billion for the ’08 budget.

“We’ve got some real ground to make up,” said Craig Pouncey, assistant state superintendent for finance and administration. “Fortunately, there will be some carry over balance that will be leftover from 2007.”

State Superintendent Dr. Joe Morton told the board he is not calling an end to the “golden era of growth.” Instead, he’s raising a caution flag. Though the ’08 budget is based on 8 percent growth, actual growth for 2007 is expected to be around 6.32 percent, and growth in 2008 is anticipated to be around 5.05 percent. The state’s average growth rate has been 5.25 percent over the past decade.

“In ’05 and ’06, growth was phenomenal at 11.52 percent and 10.65 percent. That is now just impossible to sustain,” Morton explained. “We spent more than we grew because we spent carryover money. Our carryover days are about to come to an end. So, we’re going to have a little sobering effect here at the next session of the Legislature.”

When the board gathers for its Oct. 25 work session, it will review Morton’s education budget request. No one used the words “recession” or “proration,” but Pouncey said things aren’t as dismal as in 2001, when proration was declared and there was no growth. Morton added that the state has a rainy day account and a proration prevention account of more than $670 million to lessen the impact of proration.

Pouncey said now is the time to prioritize in a way that meets students’ needs but ensures expenditures match resources. Among those needs, according to the Governor’s Commission on Quality Teaching, is about $13 million to address the state’s teacher shortage through increased career options, complete and appropriate teacher preparation, adequate compensation and improved working conditions.

Board members Sandra Ray and Randy McKinney raised questions regarding the state’s DROP program. Ray wanted to know if the delayed retirement option program, which has paid out $272 million since 2002, has impacted retirement system costs. Morton said the same amount of money would’ve been paid to the retirees had they retired rather than kept working. He added that raises and cost-of-living adjustments have impacted costs.

Morton said K-12’s NAEP performance is its trump card. Alabama is first in the nation in fourth-grade reading gains and showed twice the national growth in fourth- and eighth-grade math scores.

“There’s going to be some tough decisions made, the toughest obviously in the Legislature. I hope we can make the case that we have hard data to back up the fact that when you put money in K-12 education you get your money’s worth out,” Morton said.

The state board meets on K-12 issues Oct. 11 and in a work session Oct. 25.

—Denise L. Berkhalter