Each day brings another report that a legislator says the Education Trust Fund is awash in money and the “surplus” should be used for non-education purposes.
I am neither historian or accountant, but in this case I feel confident enough to describe things in terms most Alabamians can hopefully understand.
In 1995 our legislature enacted what is generally known as the Foundation Program for education. According to the School Superintendents Association of Alabama, this law was intended to provide an equitable, basic funding stream for public K-12 schools across the state. Equity came through a mandated 10-mill equivalence in local property tax which local school systems had to commit to the Foundation Program to provide basic (a foundation) needs.
This “partnership” between the state and local systems is supposed to provide each system with 1) a minimum number of teachers 2) principals, assistant principals, librarians and counselors 3) operations money known as Other Current Expense for support staff and 4) basic support for classrooms such as textbooks, technology , professional development and library enhancement.
(The state revenue department determines how much the value of 10 mills of property tax generates in each system and this amount is then deducted from the state’s Foundation allocation to the local schools. In other words, I owe you $10 and I’m selling you something worth $20, so you pay me only $10 and we call it even.)
Here’s the catch. The state has not being upholding its end of the bargain. As pointed out by the superintendents association, OCE funding has decreased by more than 25 percent since 2007 while these expenses have steadily risen. Transportation costs are supposed to be fully paid by the state. They are not doing it.
Then in 2011 the legislature threw the Rolling Reserve Act into the mix. It was sold as being how to avoid proration that occurred when revenue projections for the Education Trust Fund fell short and school systems had to scramble near the end of a fiscal year to slice expenses. This usually caused havoc and a lot gray hair.
This act looks at growth in the education budget for the past 15 years and determines an average. So current expenditures are capped at this average.
So 15 years ago you are making $25,000 a year and get a $1,000 raise each year since. You are now making $40,000 per year but your Rolling Reserve says you can only spend $32,500 since that is the average income over that time span. And though the house needs a new roof or little Jane needs braces your hands are tied as you can not use all you really have.
In theory, the Rolling Reserve may sound fine, but in reality you can never catch up to the needs and what you really have is perpetual proration.
As the economy has rebounded from 2008, revenues to the Education Trust Fund are increasing, but monies in excess of the Rolling Reserve are unavailable for immediate needs. Some of which the state has scarcely funded since 2008. Seems to me that any lawmaker claiming education is sitting on a surplus makes as much sense as someone who is behind on their mortgage payments by six months bragging about how much money they have in savings.
Thursday night I attended the Baldwin County school board work session on their upcoming budget. They have 532 fewer employees now than in 2008–but 4,461 more students. Their FY 2015-16 budget is $18.6 million less than last year. I seriously doubt any of the seven board members there think there is a surplus of education dollars.