I just finished attending a legislative summit on education in Hoover. There was some great statistics and budget numbers offered at the conference that I wish more legislators could hear. While think there are wildly different ideas on how to address the problem I think there is little doubt that we do have some serious issues ahead of us in the education budget debate. There is something in these numbers for everyone to like and dislike at the same time. There are also some glaring needs for reform in them.
Here are a couple of numbers that I thought fellow bloggers might find of interest:
• In 2010, at least 60 school districts will have to take out loans to meet payroll.
• With the economic downturn hammering sales and income tax collections, spending in the education budget will be $1.4 billion less than what was spent in 2008. The budget for 2010-2011 is estimated to allow for somewhere around $5.29 billion in total revenue.
• The cost of retirement benefits for all education personnel went from $300 million in 2004 to an estimated $780 million in 2010.
• Alabama drained its entire rainy day account of almost half a billion dollars to limit the effects of proration.
• In 2010 it will cost the State of Alabama $750 a month for each employee in education while the employee with single coverage will pay $2 toward this cost. Family coverage will be considerably higher as will the amount paid out by the employee.
• From 2005 to 2010 the state saw the cost of health insurance per education employee go from $6,996 to $9,024 per employee.
• Overall the cost of the entire health insurance benefits package for education employees will cost $960 million in 2010.
• Since 2006 Alabama has increased funding for K-12 initiatives like the reading and math initiative by $89 million.
One thing that is quite evident from these numbers is that we must reform the pension and public health care system in the education budget. Every state is facing the same issue as Alabama when it comes to huge reductions in services and available revenue sources. While some at the conference were still under the delusion that new revenue (read taxes) needed to be approved for the state, I think an overwhelming majority of this state would argue differently. There is no doubt we have some serious problems but that might be the opportunity we need to make some serious changes in how we spend and budget in our state.
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   Sen. Steve French, Sen. Zeb Little, Rep. Ken Guin, and Rep. Cam Ward will be blogging here during the 2010 Legislative Session. Education Budget Recap Posted by Rep. Cam Ward, on January 10th, 2010, at 11:09 am23 comments to Education Budget Recap |
ChangeI wish my friend Hinton Mitchem godspeed and good luck after his retirement from public service. Hinton, on Monday, announced what many had suspected — he will not seek re-election. I remember meeting Hinton for the first time while I was a student at Auburn University. He served the people of his [...] Ten Minutes in the House, Senate Moves On Here is a quick preview of the upcoming week in Montgomery. This week will be a standard legislative schedule for the House. We will be in session on Tuesday and Thursday with committee meetings scheduled for Wednesday. Back in the Day... Union Avenue in Ozark in the 1920s |
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Yea, right! Let’s see them cut education employees retirement and health care benefits, over the objection of Dr. Hubbert!!!!!!!
I don’t think you will see a cut in benefits but I would be surprised if there was not at least some increase in what education personnel pay for their health insurance. I don’t think it will be huge but I do think for the first time in two decades that this is a possibility. One thing for certain is there won’t be any new taxes passed.
No New Taxes!!! Wow, that’s a shocker, right here in election year! I’ll borrow a quote from the Auburn fans, “Just wait till next year”!
I always look forward to hearing from those candidates who pledge to raise taxes if elected. I’m sure the people of Alabama do too.
There will however be new taxes proposed. Hubbert and co have already passed their resolution approving increases on items and raising taxes on businesses, right here in an election year.
In light of the budget problems, I assume you will be introducing a bill to repeal the Legislative pay raise you folks gave yourselves a couple of years ago.
Cam,
They are only paying $2.00?
Take a look at statewide stats on topic: http://www.statehealthfacts.org/profileind.jsp?cat=5&sub=67&rgn=2
This benefit level seems way out of proportion to the typical insured Alabama worker.
Good One, Old Prosecutor!! We’ll see if ole Cam steps up to the plate and offers that one. I’m sure it’ll pass right before the bill to cut teacher benefits! Oh, I’m sure there will be numerous legislators who’ll have their photos taken giving back their salary, in light of the budget crunch. What they give back if the $15 per day salary. What they don’t give back is the expense allowance, etc. that amounts to the big bucks! It does look good in the local newspapers in an election year! You know their sole purpose in Montgomery is to look after, and take care of the taxpayers of this state!
I’ll be glad to take that one Goat Hill. I know a lot of legislators avoid the blog because they don’t like to get into these fights but, what the heck? Actually when you turn down the increase as I did you are not talking about the $10 a day salary because it is constitutionally mandated and therefore when the legislature voted for a pay raise (which I did not twice, and once in a recorded vote) it voted for an increase in the expense allowance. You can turn down the $10 a day I guess but in the written letters of those who turned down their increase it was clearly stated that the expense allowance approved be turned down. Not only did I turn down the increases each year I also donated any monies above what I originally received when I was elected to charity. Feel free to check with legislative accounting office to verify it. Or of course you can feel free to call me at home any time if you wish to talk about it some more or have some other ideas on this budget crisis.
Cam, I hope you will vote for letting the people have the right to vote on “bingo” or whatever they want to call it. I am not a Milton or Gilley person posting this just someone that would like the chance to vote yes or no. Also, I think that an extra 300-500 Million would not hurt the budget either.
O.K. I’m not clear on how checking with the legislative accounting office to verify that you donated monies to charity, will confirm this. Do they keep records of charitable donations you, or other legislators make? If the constitution mandates you take the salary, does it prohibit you from making a donation, in the same amount, back to the state general fund? If it’s donated to charity, how does that help the general fund? There are numerous deserving charities out there, but donating to any/all of them doesn’t help the crisis in the state general fund, does it?
“They are only paying $2.00? ”
But they Vote like their Told.
The Taxpayers of Alabama are buying the votes, for those who wish to keep Alabama the “Capital of Corruption”.
Isn’t the Union Boss Paul Hubbert the smart one?
Hey Goat I think I’ll just go ahead and concede the argument to you. You are probably right, there are a lot better ways to run state government. I am sure we could all do a better job in our decision making. I’ll just give it my best and hopefully it will be good enough to help move the state in at least somewhat of a better direction. One thing is for sure, you will never hear me say I have all the right answers. Look forward to the debates ahead Goat!
Ahh, Goat Hill’s refreshing take on politics. Run, Goat, run. Change things or continue to be the bitter dude on blogs. If Cam didn’t donate to a charity of his choosing, those monies would have ended up in, say, one of Hank Sanders’ family run charities, for example. I’m a lot more comfortable with Cam making that donation than that money sitting for Sanders, Bedford, Barron to spend.
I am so delighted that Cam will be my new Senator in November of 2010!!!
Since I started the discussion let me clarify. Its about leadership. The legislature will be asking state employees/teachers and citizens to take cuts. Real leadership would be for the legislature to share the pain.
Its fine for Cam Ward or any other legislator to give the raise to charity but that does not help the state fund. Further Ward and others can change their mind and not donate as they please. The cuts they will have to impose will not be voluntary to the groups I mentioned.
Typical political answer. Just pass and move on without addressing the questions. Also Anonymous, your thinking is typical of those who live in the districts of the senators you mentioned. They love their senator, just like you love yours. It’s always the senators and reps. from other districts that are the problem! You go and stand in line to vote to re-elect yours, and they’ll do the same, and we’ll see if things change!
Goat, sounds like you just hate em all. I thought we were talking about the education budget but you sound more like you just like any one which is fine. You should step up and run yourself then. I live in north Alabama so Mr. Ward does not represent me but I respect him for being out here engaging in the debate and least being willing to put his thoughts and views out there. I wish my representative and senator were more like that.
Goat, I think if I told you I agreed with you on every single issue you have mentioned you still would find something to be angry with me about so I have learned to accpet my beatings and just keep doing what I think is best. You definitely should consider running yourself though. You seem to have a passion for the it. Old Prosecutor, I think you have a point about sharing the pain and I will be in favor of what you mentioned in regard to enforcing the same cuts on legislators that are required of state employees or educators. While my post did not mention the General Fund I think it is probably in even worse shape than the Education Budget.
Cam, thanks for sharing this info. If you could expound on these topics I would appreciate it:
“cost of retirement benefits for all education personnel went from $300 million in 2004 to an estimated $780 million in 2010″
Is $780 million for current obligations only? If so, what are the projected pension liabilities? Is this the ‘bow wave’ of future spending?
“drained its entire rainy day account of almost half a billion dollars to limit the effects of proration”
Costs per employee are rising, revenues are down (and I would expect that they aren’t going up anytime soon), tax increases are unpopular and likely to be voted down, and there are no more savings accounts to tap into (except the Trust Fund).
This seems like a good time to address what appear to be systemic problems in education funding and budgeting. Since more money is unlikely, then fewer employees / expenses are more likely.
“In 2010, at least 60 school districts will have to take out loans to meet payroll.”
This seems like a bad idea and the practice is unsustainable. Can the legislature prohibit school systems from borrowing from Peter’s grandkids’ future earnings to pay Paul’s currect expenses?
Good questions Reactionary. My understanding is that the $780 million were for current and future liabilities. As far as the future growth of this number from the presentation I heard it appears that it could actually level off in the next 5 years if COLAs for retirees are not added.
There are two rainy day accounts for the Education Budget. Both of those were added to over the years by the legislature. Both have now been emptied. One is constitutional so by law we will have to start paying it back at some point. Keep in mind there are also two budgets in Alabama that money cannot be moved from one to the other. There is an Education Budget and a General Fund Budget.
On the issue of local districts borrowing to meet payroll expenses, I would think the legislature could pass a bill to prevent such lending although they are almost always short term loans and therefore do not have long term impacts. To answer your question though, yes a bill could be enacted.
I suspect the primary answer to the problem will probably be to cut programs (many of which are very popular) but directly related to the day to day classroom instruction. I also feel like AEA will likely agree to some increase in teacher contributions to the health care system. While I don’t expect they will accept shouldering the entire burden I do believe they will probably agree to some modest increase in contributions. This is my guess from what I hear from teachers anyway. I could be wrong.
Cam,
I want to see whose Ethics Commission subpoena power bill travels farther, yours or Alvin’s?
Two masters of the lower chamber. One on his way up, literally, the other, the grandfather of the Alabama House.
To be continued….
Cam, I fully expect to see ‘enrichment” programs such as art, music, and atheletics reduced or eliminated for the next year or two in many school districts. That being said, I would venture to say there are methods to retain these programs.
How does the privatization of these programs sound?
Many of the Teacher/Coach combo’s I have witnessed over the years are good at one, but not so hot at the other. Replacing teachers with a coaching stipend with teachers vested wholly in the education facet would seem rather intuitive, but I doubt that will happen. Also, most coaches recieve additional compensation in many areas from outside boosters.
I guess I’m suggesting we pull the coaches out of the classrooms and allow them to coach on a part time basis as private contractors, with their direct pay coming from the booster clubs. If the community wants to have a state championship football team, by all means let them. But I’d hate to see Alabama sacrifice education for the good of the ole pigskin.
Also, I’ve met several certified art educators and music educators that are competent enterprenuers and could work as private contractors as well. With a little competition and the removal of large amounts of managerial and overhead staff you could see these programs retained while still meeting current standards of education.
Lets hold off on why AEA would argue against this.
Just some of my more random musings!