Ballot measure helps schools

Published 1:48 pm Wednesday, October 29, 2008

By By Kerry Whipple Bean – publisher
Alabama school systems got notice Tuesday that they will receive only 75 percent of the money owed them by the state this month.
While the state hopes to pay the balance within a week, the precarious cash position illustrates the money crunch the state department of education is in with its budget, Brewton City Schools Superintendent Lynn Smith said.
A measure on the Nov. 4 ballot would help ease the mid-year budget cuts most school systems expect to see this year as the state's finances continue to fall short of expectations.
Amendment One would allow the state to borrow more money than it is currently able from the Alabama Trust Fund, an account set up to handle the windfall profits from oil and gas royalties. A 2002 amendment set up the Education Trust Fund Rainy Day Account but capped the amount of money the state could borrow at 6 percent of that year's education budget, which has grown since then.
Smith, who said he is voting for the amendment, sees pros and cons to it. But with mid-year budget cuts known as proration nearly inevitable, borrowing money now and paying it back over six years could lessen the impact those cuts would have on schools.
The amendment is not worded as a one-time opportunity to borrow from the trust fund - but Smith pointed out that a one-time loan is all that is practical.
Under the current amendment, the state education department could borrow up to $248 million. The new amendment would allow an additional $187 million. That total, paid back over six years, would be 1 to 2 percent of the current budget each year for six years.
Smith said that would be easier for the state department to handle than to cut schools in a greater amount this year.
Brewton schools have more than budget cuts to be concerned about. With falling enrollment, the school system will receive fewer state dollars for teacher units next year. Smith said the school system can handle those cuts - but likely not those cuts plus heavy proration at the same time without having to make some tough decisions.
Smith emphasized that Amendment One is not a bailout for schools, since the state department must pay the money back to the trust fund.