Proration: ‘We know it’s coming’

Published 2:28 am Sunday, December 7, 2008

There’s no question of if the state’s current education budget is headed for that dreaded “p” word. It’s when.

Gov. Bob Riley said in a news conference last week he’s getting closer to declaring proration for the state’s education budget, and local school officials said they think they are ready to weather the storm.

But, the often discussed “proration” word raises a lot more questions than simply those. Will students still have the same education opportunities? And, will teachers still have jobs?

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The “p” word

Proration really all boils down to one thing — a lack of income.

“(The state of Alabama Legislature) will convene in February and during the session will write a budget for the next year (which begins Oct. 1),” said Troy University’s Director of Government Relations Marcus Paramore. “They are making a budget based on projected revenues.”

And when those revenues collected from sales taxes and other state incomes aren’t produced, there just isn’t enough money to go around.

“When you produce a fiscal year ’09 budget based off projected revenues, and the revenues don’t match up, you have proration,” Paramore said.

In a special session this year, the Alabama State Legislature passed a $6.36 billion budget, but the revenues projected have fallen short both months of this fiscal year.

In both October and November, the first two months of a budget year, schools across the state have only been appropriated a portion of their monthly sales tax revenues on time.

Paramore said legislators will often use history to base these revenue projections. Only this time, history has failed. It’s not the only time that has happened.

The History

“History’s not going to tell you when the next economic downturn’s going to be,” Paramore said.

Since 1950, Alabama’s education budget has been prorated 17 times, two of them in the last five years.

In 2003 was the last time educators faced these budget shortfalls, though a Rainy Day Fund eased the pain for local schools.

Now, lawmakers are hoping the passage of Amendment 1 will do it again.

“The hope is with the passage of Amendment 1, when proration is called, they will be able to get enough money to keep from cutting our allocations from the state in the remainder of this fiscal year,” said Troy City Schools Superintendent Linda Felton-Smith.

She wasn’t superintendent in 2001 and 2003, both proration years, but she still remembers it well as a high school principal.

“We had to look at all the levels at which we could cut expenditures,” Felton-Smith said. “Any travel we could eliminate, we did. And field trips, the amount of paper we used, anything we had control over, we watched.”

Even some personnel cuts were made, Felton-Smith said.

At Pike County Schools, it was a similar story.

Superintendent Mark Bazzell said he remembers the former superintendent going to the bank during 2001 to borrow money to make it through the year.

“In years before, we had huge cuts in staff, programs, deferred maintenance and deferred instructional materials and supplies,” Bazzell said. “We didn’t have any reserves or an extra penny sales tax.”

And at the university level, Paramore said Troy also had to make cuts, but he isn’t sure what exactly was done.

“I’m sure we had to tighten the belt, and did those types of things we’re required to do,” Paramore said.

What about now?

With the passage of the state’s Amendment 1, local school officials said they think their schools will make it through the rest of this academic year without a hitch.

Unless proration is higher than 7 percent, the Rainy Day moneys should be enough to finish the year without any cuts, superintendents said.

“At the present time, we are not anticipating any services for our students being cut,” Felton-Smith said.

In Pike County Schools, Bazzell said officials have spent the last six years building a reserve just for occasions like this, and with $3 million in the bank, he feels prepared.

Paramore said he’s sure expenses will have to be made with caution to continue through the academic year.

But, for officials to specify any cuts would be speculation at this point, since Riley hasn’t declared the proration percentage.

Last week, Riley said a final analysis should be completed by the end of this week, and a decision could come soon after that, reported the Associated Press.

Looking ahead

Even if schools have enough to get through this year, they are gearing up for an even more devastating 2010 budget.

Already this year, the state budget is 5.5 percent smaller than it was in 2007.

Troy University alone was cut 11 percent, Paramore said. And in order to prevent proration next year, it’ll only get smaller.

“What people often don’t realize about proration is we always get hit two years in a row,” Bazzell said. “We’ll have to really look at tightening our belt next year, and well do that in a manner that impacts students very little.”

Felton-Smith said Troy City Schools are preparing for the same situation.

“In planning for the next fiscal year, we will have to study what the budget’s going to be,” Felton-Smith said. “And we have to take the necessary precautions so that we can still provide quality educational opportunities for the students.”

But whether the big impact comes this year or next, schools will just have to wait and see.

“We know it’s coming. It’s just a matter of when and how much,” Paramore said.