legislative update
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Alabama Educational Technology Conference September 30, 2008. Legislative Update. Lisa A. Woodard School Superintendents of Alabama Director, Research and Legislation. Review of the 2008 Regular Session. Education Laws and Resolutions Education Budget. Education Laws and Resolutions. - PowerPoint PPT PresentationTRANSCRIPT
Alabama Educational Technology ConferenceSeptember 30, 2008
Lisa A. WoodardSchool Superintendents of AlabamaDirector, Research and Legislation
Education Laws and Resolutions
Education Budget
HR 564 -- Examiners of Public Accounts sent into school to collect data currently on file with SDE: list of each public school system; salary of the superintendent; number of individuals employed within the central office; and the total payroll for the individuals employed within the central office of each public school system.
ACT 2008-281-- Provisional Certificates: expands opportunities for obtaining a provisional teaching certificate (ABC) to include middle school; extends the time from 3 to 4 years; raises the fee to $30; and allows three paths for admission to the program.
ACT 2008-379 – Competitive Bid Bill: increases the minimum amount for which competitive bidding is required from $7500 to $15,000, and includes city and county boards of education in the list of awarding authorities that may establish local preference zones for contracts that will be competitively bid. Exempts purchases made by boards under joint purchasing agreements; allows school boards to enter into regional purchasing consortiums with county and city governments; allows local authority to make purchases or contracts through a reverse auction procedure; and allows for consideration of life cycle costs in competitive bidding.
ACT 2008-543 – Add Back Bill: provides for the collections of certain corporate income taxes not previously collected. Over the next two years, it is estimated to produce an additional $74M for the ETF.
ACT 2008-508 – Education/General Fund Rainy Day Account: repeals and reestablishes an Education Trust Fund Rainy Day Account (ETFRDA) within the Alabama Trust Fund and creates a General Fund Rainy Day Account (GFRDA).
Purpose: Increase the quality of and obtain the best price for goods and services Raises the threshold to $15,000
▪ Pest Control Optional bid bond
▪ Lawn care Joint purchasing, expanded options
▪ School boards may join any joint purchasing agreement as long as certain conditions are met
▪ Can use U.S. Communities Joint Purchase Agreement Online bidding (reverse auction)
▪ “eBay” Lifecycle Option
▪ Allowed in situations where the life cycle costs can be “reasonably ascertained” using “industry recognized and accepted sources.”
Talk to your CFO
ActualFY 07
ActualFY 08
Regular SessionFY 09 PROPOSED
Special SessionFY 09PASSED
K-12 64.56% 66.91% 68.70% 68.78%*
Higher Ed
27.42% 29.02% 27.58% 27.50%
Other 8.02% 4.07% 3.72% 3.72%
K-12 $4,032,216,518
$4,502,588,651
$4,368,827,342
$4,373,827,342
*By increasing the percentage of the split for K-12 we were able to prevent an additional $118,652,400 in cuts.
Negative numbers are actual decreases from FY08. BLUE numbers were presented to SBE on 09/25/08 as a Proposed Draft of FY10 Budget and will be discussed further next month.
High HopesESLAdvanced PlacementPre-School Special EdCareer TechTechnology Coordinators (-
$950,000) SBE Proposed Draft (+$1.95M)
Rewards to SchoolsTeacher RecruitmentTeacher Mentoring
2003 2.82% 2004 9.5% 2005 11.5% 2006 10.6% 2007 6.5%
FY07 budget was based on 8.62% growth
$118M less than lawmakers expected2008 1.29% (9/23/08)
FY08 budget was based on 5.04% growth Current growth rate is 1.29% (09/15/08)
* Source: Alabama Finance Department
Possible revenue: $90M remaining in PPA $30M in unpaid income tax refunds
not refunded until Oct. 1 $40M in early collection of tax
payments from corporations $10M from AIDT (Workforce
Development Funds not used because of Air Tanker rebid)
FY08 Revenue @ 1.5% Growth (optimistic)
$5,941,795,638
FY08 Expenditures ($6,729,089,636)
FY08 Budget Imbalance ($ 787,293,998)
Source: Legislative Fiscal Office
FY09 assumes trust fund growth of 4.9% and $64M from the Proration Prevention Account LFO projected growth estimate is 2.77% Current growth rate is 1.29% (09/23/08)
$134M ETF FY09 budget shortage on 10/01/08 $64M from the proration prevention
account $30M for FY 08 Income taxes not paid $40M for early collections of corporate
taxes (4th Qtr. FY08 paid in Sept. 08 instead of Dec. 08)
Rainy Day Fund --$248M▪ Alabama Trust Fund earmark▪ “Credit Card”▪ Must be repaid in 5 years
▪ Withdrawals limited to the average of the estimated available revenue certified by the Finance Director and the LFO
▪ Alabama Constitution Amendment 709▪ Proration must be declared by the Governor to access▪ 25% of what is borrowed goes to County and Municipal
Improvement Trust Fund and is NEVER paid back to the Alabama Trust Fund.
Proration Prevention Account-$0▪ More flexible▪ Savings Account▪ Legislature repays at its discretion…up to $75M▪ Alabama Code: 40-1-32.1▪ Act No. 2008-544 passed in the 2008 Session:
▪ Removes the $75M minimum for the account ▪ Does not require repayment to account during years of proration▪ Requires that 75% (up from 20%) of the ending balance in the ETF from the
preceding fiscal year of “unanticipated and unappropriated revenue” be appropriated to the PPA
Existing Account Proposed Amendment
Finance Director Revenue Estimate for FY09
$6.360billioncertification dated 5/16/08
Finance Director Revenue Estimate for FY09
$6.334 billion
LFO Officer Revenue Estimate for FY09
$6.155 billion Legislative Fiscal Officer Revenue Estimate for FY09
$6.155 billion
Average of the Two Estimates
$6.258B Highest of the Two Estimates
$6.334B
Estimated Available Revenue for FY09
$6.030B* Estimated Revenue Available for FY09
$6.030B*
Amendment 709 Cap (limited to FY02 Appropriations)
$248 million Amendment 1 Cap (6.5% of Prior Year Appropriations)—see next slide
$437 million
Projected Proration: 3.21% Projected Proration: .23%
Sources: Dr. Henry Mabry, AEA Financial Consultant and Dr. Ira Harvey, SSA Financial Consultant
*FY07actual=$5,854,027,193 x 1.015 (FY08) x 1.015 (FY09)=$6,030,965,000
Amount withdrawn in a fiscal year may not exceed 6.5% of the previous fiscal year’s ETF appropriations
Impact of Amendment 709 on ETF for FY10
ETF Appropriations for FY08ETF RDA PercentageETF RDA for FY09
$6,729,089.6566.5%
$437,390,828
ETF Appropriations for FY009
ETF RDA PercentageETF RDA for FY10
$6,359,550,000 6.5
% $413,370,750
Years to Payback
Amount Fiscal Year
6 $ 72,898,471 2010
5 $ 87,478,166 2011
4 $109,347,707 2012
3 $145,796,943 2013
2 $218,695,414 2014
1 $437,390,828 2015
1% ETF growth = $60M
Student Based Funding 72% of the total ETF for K-12
Teaching and Learning Restore $37M lost from FY08
OCE Actual costs for operations and support salaries
Fuel Costs Must be based on current price at the pump
Technology Funding Maintenance, upgrades and replacement ($125 per student) Information Technology Services Program ($125,000 per system)
Additional Units for Middle and High Schools Flexibility in how and where assigned
School Nurses Actual costs based on required salary matrix
Assess what is essential to the operation of your technology program Hardware Software Humans Other
Schedule a meeting with your superintendent to discuss this.
SDE submits the agency budget to the State Finance Department on or before Nov. 1 Must be approved by the SBE before that
dateGovernor uses 95% of this
recommendation in his budget that he submits to the Legislature.
You need to make sure that what is important to you is in the SDE budget.
Playing Well with Others
Discussions that focus on funding alone will not be successful.
Must address larger issues: Maintenance of the technology investment Accuracy of data Staffing to support the investment 21st Century Skills Workforce Development College Preparation Technical Literacy
1. Become Familiar With the Environment Who else has the same interests as you? Who else benefits from your agenda?
2. Establish Organizational and Personal Credibility
Do elected officials know who you are? How can you strengthen name recognition? Can you utilize the strength of your business
members?3. Build Consensus
Compromise and balance4. Mobilize and Engage Your Membership
Identify friends Governor Riley Dr. Morton, Mr. Pouncey, Dr. Bice Superintendents State School Board members Business members AEA
Meet with your friends during the month of October
Listen to what your friends say Revisit your priorities
Look at revenue projections Compile the data from your friends Establish your priorities
Talk to your superintendent.Talk to your legislator.
Make your message important to your elected official.
Provide a one page fact sheet or platform. ASK for support. Follow up with your legislator between now
and February 2009 (Legislative Session).Talk to the Governor.
Share reports of legislative meetings on your listserve.
Identify advocates/neutralize opponents.
Designate a subgroup of your members that will attend budget hearings and key committee meetings in Montgomery. Can AETA have someone in the State
House every Wednesday?
A man of character finds a special attractiveness in difficulty, since it is only by coming to grips with difficulty that he can realize his potentialities. Charles de Gaulle
There is no education like adversity.Benjamin Disraeli
Obstacles are those frightful things you see when you take your eyes off your goal.Henry Ford
Lisa A. [email protected] work334-235-3553 cellhttp://www.ssaonline.org
ETF Rainy Day Fund 546,738,535$
General Fund Rainy Day Fund 230,762,776$
Total 777,501,310$
TOTAL REDUCTION IN ALABAMA TRUST FUND
FY09 Revenue Growth @1.5% (Estimated available funds of $6.03B less increased debt service of $60M for PSCA)
$5,970,965,164
FY09 Budgeted ($6,360,000,000)
FY09 Budget Imbalance ($ 389,034,836)
FY09 Amendment 709 Funds ($248,000,000)
FY09 Amendment 1 funds authorization cap (if passed by voters in November)
($141,034,836)*
FY09 Proration Amount $0
FY09 Proration Percentage 0%
*FY09 Budgeted less (projected growth +PSCA debt service)-Amendment 709 funds
FY10 Revenue Growth @ 1.5% $6,060,529,641
FY09 Level Funding for FY10 ($6,360,000,000)
FY10 Additional Benefit Costs ($150,000,000) SWAG
FY10 Minimal Spending ($6,510,000,000)
FY10 Budget Imbalance—Required Cuts
($449,470,359)
FY10 Amendment 1 Balance (cap moves year to year, lower in FY10 because funding in FY09 was lower)
$24,365,164*
Amendment 1 level of proration ???
*(FY09 level funding x 6.5% = $413,400,000 cap for borrowing) less $389,034,836 borrowed in FY09
9/30/2007 9/30/2006ASSETS:Current Cash/Cash Equivalents 210,334,585.55$ 239,369,533.97$
Total Current Assets 210,334,585.55$ 239,369,533.97$
Long Term Investments Equities 933,936,136.45$ 811,629,872.67$ Fixed Income Securities 1,902,203,870.00$ 1,778,860,005.58$ Land 82,832,280.90$ 76,660,212.50$ Land Partially Donated 808,027.29$ 808,027.29$
Total Long Term Investments 2,919,780,314.64$ 2,667,958,118.04$
TOTAL ASSETS 3,130,114,900.19$ 2,907,327,652.01$
YEAR ENDED
ALABAMA TRUST FUNDBALANCE SHEET STATEMENT OF ASSETS