Overview of Second Special Session

Overview of Second Special Session

Retirees, this special session was a success as a General Fund Budget was passed. Before I go into the impact of this budget, I want to share with you how the education family worked together during both special sessions. Beginning back in July, representatives from K-12, post-secondary, four year public universities, CLAS, state department of education, superintendents, school boards and AERA met to work together to protect education funds. If you have been around for a while, you may recall the years when maybe AEA battled higher education for money. This was not the case in 2015 special sessions. We stood firm to protect public education. I believe this was key to working together with Senator Trip Pittman and Representative Bill Poole, chairs of the house and senate education budget committees.  It was a team effort or as many say “education family effort”!

Governor Bentley did not get everything he wanted and unfortunately some services may be reduced and senior citizens could be impacted. There was a lot of talk about money coming from the 2015-2016 ETF Budget that was passed during the regular session. Here is an overview of how money was used to shore up the General Fund prepared by Tracey Meyer, Governmental Relations & Public Affairs Coordinator Office of State Superintendent – SDE Legislative Services:

Use Tax Transfer – HB30

  • This bill transfers $80M of Use Tax revenue in FY2016 to the General Fund. Starting in FY16 Use Tax revenue will be split 53% General Fund and 47% ETF.
  • It is important to note that this bill will not impact the FY2016 direct ETF budget appropriations that were unanimously passed by both chambers. 

Rolling Reserve Modifications – HB29

  • The bill takes 20% reserve established in the original act to 7.5%, a number that is more historically appropriate based on levels needed during a recession. 
  • This bill also drops the low year from the 15-year average, allowing a more dependable reflection of current economic conditions. 
  • HB29 establishes the Education Trust Fund Advancement in Technology Account which allows the legislature to appropriate one-time revenues for non-recurring expenses. Examples could include: technology upgrades, career tech equipment, or wireless infrastructure. 
  • This bill builds the reserve in increments of 2% in the first year, and 1% thereafter, of the previous year’s ETF appropriations until 7.5% is reached, finds in excess of deposits to the Proration Prevention Account will be transferred to the Advancement in Technology Account.
  • Re-amortizes Prepaid Affordable College Tuition (PACT) payments to help ensure budget stability and avoid fluctuations. 

With the above changes in place, ETF monies will increase due to the changes in the Rolling Reserve Modifications. Please watch for the upcoming issue of the Alabama School Journal for more detailed information.

Janice J. Charlesworth

Executive Director

Alabama Education Retirees Association

800-537-6867 or 334-262-4177

Visit our website www.aerainc.org