Alabama schools spend savings to stay open

AP News
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Posted: Dec 11, 2009 11:00 AM

Alabama's public schools spent nearly $222 million more than they received in revenues in the last fiscal year, which required raiding their savings accounts and borrowing money to keep doors open and teachers paid during the recession.

State Superintendent of Education Joe Morton called what happened "an economic tsunami" and he's fearful the 2010-2011 school year will be "the most difficult yet."

State education officials gave the State Board of Education a report Thursday that shows for the first time the impact of cuts in the state education budget and shrinking tax collections for schools at the state and local level.

All but 13 of Alabama's 132 city and county school systems spent more than they received in revenues in the fiscal year sending Sept. 30. They emptied savings accounts or borrowed from banks to make up the $221.5 million shortfall, Assistant Superintendent Craig Pouncey said.

He said school systems were forced into that position because the state education budget got cut after employees' salaries and benefits were already locked in for the school year.

As of Sept. 30, there were 56 school systems without enough money on hand to cover one month's bills. Pouncey predicted the number has grown since then because the governor had to cut this year's state education budget 7.5 percent due to tax collections falling below expectations.

State education officials consider one month's reserve to be an important measure of financial stability.

According to the report, the school systems that finished fiscal 2009 with revenues exceeding expenditures were: Coffee County, Fayette County, Greene County, Marion County, Randolph County, Anniston, Arab, Hartselle, Homewood, Midfield, Oxford, Saraland, and Sylacauga.

Looking ahead to the 2010-2011 school year, Morton got the school board to agree to request $3.8 billion to operate K-12 schools. That's up from $3.5 billion this year.

The school board's proposed budget is based on the Legislature holding the line on spending for teachers' benefits, K-12 schools getting a larger share of the state education budget, and Alabama's tax collections for education growing by 3 percent.

Those are all things likely to set off battles in the Legislature when lawmakers try to balance the K-12 request with budget increases sought by two-year colleges and universities.

Gov. Bob Riley is a member of the school board, but did not attend the meeting Thursday.

Riley's state finance director, Bill Newton, told The Associated Press that he's not ready to make predictions about the next school year, but education taxes aren't growing 3 percent now.

Mary Bruce Ogles, assistant executive secretary for the Alabama Education Association, said the board's proposal could lead to teachers paying more for benefits and having less take-home pay.

Morton warned that if the Legislature rejects it, the only option is to increase class size.

The Legislature convenes Jan. 12 to begin work on the education budget for the 2010-2011 school year.