The real reason for Agricultural Commissioner Ron Sparks’ delay in announcing his 2010 candidacy? The word in Montgomery is that he’s waiting to see how much fallout from the PACT troubles is going to fall on Lt. Governor Jim Folsom.
Folsom sits on the PACT Board, and that’s his name on the “Wallace-Folsom Prepaid College Tuition Trust Fund” that is the full name of the program. Folsom was notably absent from the hearing last Thursday because he was in New York with his law firm business, and at the outset did not appear to be tuned in to the strong dismay that participants in the program have felt.
Sparks by all accounts heard here was prepared to announce his candidacy for Lt. Governor on Tuesday. But if Folsom gets dinged enough that he decides to run for Lt. Governor again instead of Governor, he would be tough to beat in a re-election bid, especially in a Democratic primary. So last Thursday, Folsom missed the emotional Board meeting, and Friday Sparks calls off the announcement events.
Since then, Folsom has confronted the issue a little more directly and has released a statement. An excerpt:
At this point, I want to make it abundantly clear that from its inception the program represented a sacred trust between those investing in the program and the State of Alabama. I hold firm to the vision that created this program and reiterate that – regardless of changes in the statutory language – I believe that investments in the program entitle PACT holders to the agreed-upon return of full payment of college tuition.
This is not the time for panic, for a rush to find a band-aid solution or for commentary that might cause a ‘run on the bank’. Such action will only exacerbate the current difficulties and short-circuit the long-term goals made for our children’s future. As the economy rebounds, as it inevitably will, we have every reason to be optimistic that Alabama’s PACT investments will again begin to grow.
Whatever hit Folsom may take on this, State Treasurer Kay Ivey is sure to take a larger one, at least in the short run, as it is her office that administers the fund. Participants in the Winter Symposium for the Blackburn Institute just two ago on March 1 have told me that Kay Ivey was talking up the PACT progam then even though the letters had already been mailed to participants warning of problems with the fund. Her best-case scenario is that she and Folsom can work out a plan to provide full college tuition for those who participated. Or that Robert Bentley, Randy Brinson, and Joe Turnham can. Or Artur Davis.
Are other states having problems with prepaid college tuition plans? Mississippi’s is solid, one of the top five in the country. Florida’s guaranteed program has lawmakers looking to borrow from it to meet other needs now. Illinois reports theirs is ok. It’s not rosy everywhere besides Alabama though. Maryland and Texas are two states reporting deficits in their prepaid college tuition funds. Both of those states’ plans carry guarantees for participants.
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