Message from Dr. Henry C. Mabry, AEA Executive Secretary
Dear AEA Members:The AEA Board of Directors has adopted five resolutions to present to the AEA Delegate Assembly in December, and the board has instructed me to communicate to the membership the content of each. An explanation of the Rolling Reserve Act is included noting implications of the act because of the lack of understanding concerning this issue. Further, an explanation of Resolution #4 is provided for clarification purposes. The resolutions are as follows and by subject:
#1. Support Salary/COLA Increase
“AEA shall seek legislation to secure a salary and COLA increase for all education employees and retirees respectively.”
#2. Support Alteration of Rolling Reserve Act
“AEA shall seek legislation to reverse the Rolling Reserve Act (Canfield Bill)."
Executive Secretary Note: The Rolling Reserve Act limits the amount of Education Trust Fund growth dollars that can be invested in education. Because of this act passed by the legislature in 2011, the new spending limit formula resulted in $150 million in additional education cuts while an anticipated additional $400 million would have been available for spending.
Without suspension or alteration of the Rolling Reserve Act, there will not be enough ETF money to be budgeted for FY14 to cover all anticipated benefit costs and cover a pay adjustment to address the 2.5% pay cut enacted by the legislature in 2011 that took effect last October and is fully implemented as of October 1, 2012. Additionally, in FY15, limited spending would require further education cuts to fully fund TRS & PEEHIP. If the Rolling Reserve Act ceases to be in force, then enough money would be available to cover all necessary cost needs in public education including benefits, replacement of the 2.5% pay cut, and a 5% to 7.5% cost of living adjustment.
The stated intent of proponents of this 2011 law is that money should be set aside to avoid proration in the future. If the legislature continues to use the Rolling Reserve Act as its budgeting tool, then within two or three years approximately $1 billion in education money will be set aside in savings and could not be spent unless proration happened to be declared by the Governor.
#3. Oppose Further Out-of-Pocket Benefit Costs
“AEA shall seek legislation to prevent across the board future out of pocket expenses and/or decreased benefits, including but not limited to increased co-pay/deductibles, in the PEEHIP and Retirement programs.”
#4. Support Education Employee Retention Benefit Bill
“AEA shall seek legislation to enact the “EXPERIENCED EMPLOYEE RETENTION ACT” for all education employees which will be cost neutral to the state of Alabama while allowing Alabama’s public schools to retain an experienced work force.”
Executive Secretary Note: In 2011, the legislature repealed the Deferred Retirement Option Program (DROP) that was created in 2001. This resolution calls for the reinstitution of a similar program that would be revenue neutral, but that would help to retain teachers & education support professionals. No details were adopted by the board concerning the particulars of the proposal.
#5. Oppose Teacher Incentive to Retire Bill
“AEA shall oppose any effort to supplant experience in Alabama’s public schools with inexperience under the pretense of reducing personnel costs.”These resolutions will be submitted for approval by the Delegate Assembly. Thank you for your attention to reading these proposed resolutions by the AEA Board of Directors.
Very truly yours,
Henry C. Mabry
Executive Secretary & Treasurer