September 29, 2009

Education Budget Will Begin New Fiscal Year in Proration

MONTGOMERY - The Education Trust Fund will enter the new fiscal year on Thursday with a shortfall that requires proration of 7.5 percent, Governor Bob Riley said today.

“Given the state of the economy, we’ve anticipated for several months now that the education budget would enter fiscal year 2010 in proration, but it’s still very unfortunate and I wish it wasn’t necessary,” Governor Riley said. “Unlike the federal government, we cannot run deficits. Revenues are not at the level necessary to avoid spending cuts. With less revenue coming in and the escalating costs of employee health insurance, there’s no way to avoid it.”

Costs of the health insurance for education workers have skyrocketed. In 2009, health insurance costs for education workers were $1.135 billion - an increase of 72 percent since 2003 when the state paid $660 million.

With 7.5 percent proration, the fiscal year 2010 education budget will be $5.3 billion.

To put that in context, education spending by the state was $4.2 billion in 2003 and reached a record high of $6.7 billion in 2008.

As he has done before, the Governor is urging lawmakers to protect funding for education initiatives that have proven they work to improve student achievement, such as the Alabama Reading Initiative, the Alabama Math, Science and Technology Initiative, ACCESS Distance Learning and First Class Pre-K.