Alabama needs Amendment 1
Published 8:52 pm Thursday, October 23, 2008
More and more top educators around the state are publicly throwing their support toward the passage of Amendment 1 — and for good reason. They’re scared of what will happen to the budgets of the school districts throughout the state if it does not pass.
If passed, Amendment 1 will allow the governor to borrow up to $437 million from the Rainy Day trust fund and $188 million from the general fund to cover a shortfall in money needed for the education budget. The money will have to be paid back in six years for the education rainy day fund and 10 years for the general fund.
Alabama has two rainy day accounts for the Education Trust Fund, used to prevent shortfalls in the education budget: the Proration Prevention account, which works like a savings account, and the Rainy Day account, which the state can borrow from to avoid proration.
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The Proration Prevention account is funded with tax revenues; the Rainy Day account gives the state the power to borrow from the $3.2-billion Alabama Trust Fund, funded by the sales of drilling rights and oil and gas leases. The state emptied the $440-million Proration Prevention account to cover revenue shortfalls last year.
The Rainy Day fund was created in 2002, but a cap of $248 million was placed on it at that time. If passed, Amendment 1 will raise that cap in the face of expected revenue shortfalls and allow the state to borrow up to $437 million.
The real issue lies in the fact that the state’s education budget projects do not take into account bumps along the economic highway. Any downturn will continue to plague our public schools until real reform is pushed forward and a better system for state education funds is in place. However, we could be facing a crisis that will affect everyone if something is not done now to avert what could be huge cutbacks in the middle of a school year.
Some think that defeating the Rainy Day amendment will bring to focus the state’s real problems in funding education and prompt reform. Approving the amendment, they argue, will allow the legislature to budget money they know will not be covered by tax revenues and bailed out by the Rainy Day fund.
It boils down to this: If Amendment 1 is not passed, than we are passing down a problem that should have been dealt with years ago. Pass it now to weather the economic storm that is certainly reaching us and to avoid a crisis, then find a way to make some lasting reforms.