Local schools prepared to cope with proration

Published 10:42 pm Saturday, September 18, 2010

Two weeks before the end of the fiscal year, schools across Alabama will have to make do with less money again after Gov. Bob Riley declared another 2 percent proration in the education budget.

That means a loss of about $500,000 for Escambia County Schools and about $120,000 for Brewton City Schools.

Put another way, Brewton Superintendent Lynn Smith said, that means city schools will have to find the cash to pay salaries and insurance for 24 teachers — and county schools will have to foot the bill for about 100 teachers.

“It’s frustrating for everybody,” Smith said. “It’s a huge hit.”

For both school systems, the money will come from reserve funding.

“We’ll get by,” Smith said.

With so few days left before the end of the fiscal year, county Superintendent Billy Hines said proration is a “bitter pill to swallow.”

“There’s no even thinking about what you’re going to cut,” Hines said. “We’ve just got to take it out of reserves. Thank goodness we have the reserves.”

Riley blamed the need for proration on a lawsuit filed against BP by Attorney General Troy King.

BP told state officials Thursday that the company would not pay Alabama’s $148 million claim for lost tax revenue because of the lawsuit.

A lion’s share of the claim — $116 million — would have gone to the Education Trust Fund, Riley said. The spending cuts amount to $113 million.

“If that lawsuit hadn’t paralyzed our negotiations, we wouldn’t have to make these additional cuts to education funding,” Riley said in a statement. “One man made a brash, reckless decision to sue BP while the state was still working to recover lost tax revenue from the company. He did it without consulting me or local officials on our coast. No other state’s attorney general has sued BP at this time and King’s lawsuit stopped our ability to recover these tax dollars before the end of this fiscal year.”

Riley also blamed BP for the situation.

“As the admitted responsible party, the company should live up to its commitments, even though the lawsuit stands in the way,” Riley said. “No one is going to benefit from this nonsense except the lawyers.”

The Education Trust Fund entered fiscal year 2010, which started Oct. 1, with proration of 7.5 percent. The economy was on track to be able to sustain proration at 7.5 percent for the entire 2010 fiscal year until the BP oil disaster in April. The state estimated the disaster resulted in a loss of $148 million in lost tax revenue that would have gone to the state from May through September, including $116 million in revenue that was earmarked for the Education Trust Fund.

The state is legally required to have a balanced budget, so when revenues fall short, proration is necessary.

“As I’ve said all along, litigation is an option that can be exercised if it becomes necessary,” Riley said. “But it should never have been the very first step.”

Riley and King engaged in more political back-and-forth Friday as they argued over the cause of the cuts.

Speaking directly to BP in a press release, King said Riley has chosen to negotiate “from a position of weakness.”

“The governor seems unable to see beyond the end of the few months left in his term and has approached you as a panhandler begging for crumbs,” King said.

“In fact, the governor became complicit in helping you avoid paying with his desperate grab for enough money, not to make Alabama whole, but to avoid further state budget proration before his term ends. I have chosen an approach of strength. If you will not pay Alabama what it owes, a court will force you to do so.”

King said BP has not paid claims for any other states, either. Riley disputed King’s claims.

“At the state’s request, BP had already paid $77 million to the state before King’s lawsuit was filed, and that doesn’t include many millions more in reimbursements for our out-of-pocket response costs,” Riley said.

In the meantime, the education budget has been in proration for much of the past two years, costing Brewton City Schools $2 million and Escambia County Schools $8 million during that time.

“That’s taking away money from education, from the kids,” Hines said.

Smith said he is expecting more proration in the new fiscal year beginning Oct. 1, possibly around 3 percent, to make up for budgeted growth that simply isn’t happening.

“Every grade in every school is impacted,” Smith said. “That means students are impacted, and parents are impacted.”