Posted by According to state Rep. Barry Mask (R – Wetumpka), Gov. Bob Riley assured a “group of Republicans,” including Mask, that he will call a special session to deal with the financial shortfall in Alabama’s prepaid college tuition program. From the May 18 edition of “Behind the Mask,” the Representative’s newsletter to constituents:
Last week a group of Republicans (I was there) met with the Governor on the PACT problem. He assured us he would call us into special session to deal with this. Right now Dr. Bronner has his actuarial analysts looking at it to determine what needs to be done. Its imperative we get this fixed and soon. The fund is solvent enough to pay out obligations for the next few years.
Good news for anxious parents. Maybe also good news for Kay Ivey’s gubernatorial ambitions.
On the PACT topic, the PACT Board met today.
The program’s actuary told the board the fund has enough money to pay tuition this fall and next spring. The PACT Board voted unanimously to assure parents that it will keep paying tuition this fall and next spring.
The Legislature adopted a resolution on its final day Friday, asking The Retirement Systems of Alabama to conduct an actuarial study of the fund.
The report to Gov. Bob Riley and the Legislature is expected within 30 to 45 days.
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I am sure a PACT bail out by the state will be popular with the 44k +- folks invested in the program. However, a bail out might not be so popular with the 4 million plus that are not invested in it and will be asked to pay for it.
just saying…..
Great points, Therm. This is a lose-lose for Kay Ivey’s supposed gubernatorial aspirations. If they fix it, she was responsible for causing the problem and gets no credit for the fix. If they don’t, the problem lingers.
She is done. Done. Done.
She should give it up rather than creating the outcry that will result from asking for a promotion in the face of this fiasco.
Is the PACT board using the same actuaries that let the program run for years without EVER being able to meet their future obligations? This was a time bomb from the start.
If Kay goes, so must her co conspirator Folsom.
It’s the Wallace-Folson PACT, and he’s been a key Director.
PACT has enough money to be fully solvent until 2014, so no reason to spend untold amounts of money for a special session. Far better to take some time, wait for the market to rebound and then see what needs to be done. 99% of the PACT problems are related to the down-turn in the market – just like everyone else’s 401k – so we should see a nice bounce in PACT holdings once we finally exit the recession.
The more PACT is in the news, the worse for Ivey.
And she can assured there will be lots more news.
This is probably not a onetime bailout.
Probably this time next year it will be getting bailed out again.
I was at the meeting & my impression of what the Governor said was a bit different. My understanding was that if there was an agreement worked out on the pact program that was acceptable, he would be willing to call a special session, if necessary. He also spoke about other issues that he might include in the call if he has one.
Kay is just done. Is she crazy? If she announces for governor will Troy King announce too? Maybe Siggy will come back . . .he has less incompetence on his resume than Kay . . . .
Jim, whether the market rebounds or not PACT will not be viable. It couldn’t cover future obligations when the market was doing well.
I agree with Mike Ball.
I fight over whether Ivey or King is worse?
Now that would be contest!
Brian you are dead on. Which is why a Kay Ivey declaration for governor should be greeted by villagers in the streets with torches in their hands, out for blood . . .
Brian, not only are you right, but your point demonstrates this “bailout” will not a be one time deal.
And no one you bet on the market improving much in the near future.
More likely after a few more months the next big drop will take place and it will be years before the market gets back to today’s level and years more before it gets back to 2007 levels.
Further, the general fund and education budgets are heading for big trouble even without taking out money for PACT.
So the whole rotten crowd in Montomgery has been setting this state up for a hard fall.
anyone else hear that ivey may punt on gov and lt gov, and go for the 2nd congressional district?
Every time Ivey says “gov” someone should say “pay us back!!!!!!”
Is she serious??????
Ivey go against Bright.
I know Bright is saying – Oh God let it be true!
Be careful what you wish for liberty. Bright would have reason to be concerned over Ivey. Name recognition – good speaker – loaded with personal cash to spend. But I can’t imagine she has an interest in Congress…
Montgomery City Councilwoman Martha Roby has announced she is running against Bright in 2010: http://southunionstreet.blogspot.com/2009/05/martha-roby-will-run-for-congress.html
Interesting, Roby’s announcement. I think that she has an interesting profile–attractive, young mother, articulate. I just don’t see an opening to attack Bright given his almost 100% conservative voting record. Roby may be betting that Artur Davis will be the gov nominee and will depress the Democratic vote in the Wiregrass. That’s a decent bet, according to some friends who have seen Davis polling, his weakest area in the general is not North Alabama, where he actually runs pretty well but the Southern end of the state.
A special session wasn’t discussed as a real possibility at today’s board meeting. Ivey stressed that the legislature will meet in January, and it’s important to have something ready for them to consider.
She also seems extremely interested in ‘moving forward’ and not pointing fingers. And hey, if I’d been in charge when the fund melted down, I’d probably say the same thing.
At Left in Alabama, we’ve filed requests for the release of PACT board meeting minutes, but have waited for their release in vain. Anybody have any idea why they’re dragging their feet on this one?
I’m a PACT parent, and I want to know what the board knew about the financial status of the program and when. Contract holders were never treated to any sort of financial statements – like you’d get if you had actually INVESTED in a savings plan instead of prepaying for tuition. No. All I ever got was a yearly form letter stating that my “CONTRACT” was “PAID IN FULL.”
The board should come clean with the minutes. If they have nothing to hide, they have nothing to fear. Right?
So glad that Governor Riley shared this with everyone else who might have a stake in this issue.
#21, The Governor isn’t taking the lead on this issue, it’s the PACT board. He just said that he’d be willing to call a special session if necessary.
why don’t we put ethics on this too
Kay Ivey, from WILCOX County, running in the wiregrass based 2nd CD? Another bad joke.
Kay would be right at home in Congress, what with all the bailouts and debt . . .
POISON IVEY!!!
There is no “bailout” for the PACT program. It is called Alabama making good on promises made to its citizens. Imagine if the state said to those who paid taxes and were due a refund that there just wasn’t enough money to pay them–ever. People would be outraged. That is the way we PACT holders feel. We were guaranteed payment of our children’s college tuition if we paid into the program but now are being told that that was a lie. Fix ing the program is certainly not a handout.
It is a bailout b/c the state is not on the hook. As the PACT was designed there is no taxpayer backing. You are asking for everyone to accept a burden that we are not obligated to take on, hence it is a bailout.
The tax refund analogy is not accurate since the money to be refunded is, in fact, YOUR money.
The money I paid (as did many others) to the state for the PACT program is my money. The state IS on the hook because of the fraudulent methods used to sell the program as a guaranteed program. It was promoted as being backed by the state and the state should honor its commitment just like you or I would have to do if we were running a business.