Budget projection outlook ‘gloomy’
Published 9:01 pm Tuesday, February 8, 2011
Dire budget predictions have alarmed legislators, who feel as though it may be time to start “tightening their belts” when it comes to spending for the Education Trust Fund and the General Fund.
Joyce Bigbee, Alabama’s Legislative Fiscal Office director, warned legislators at a budget hearing Tuesday that the outlook for the state’s 2012 fiscal year seemed a bit gloomy.
“Alabama public schools and colleges in the 2012 fiscal year, which starts Oct. 1, could see a drop of as much as $687.6 million in combined spending from the state Education Trust Fund and federal stimulus money compared to this year,” Bigbee said.
Bigbee’s estimate assumes that Gov. Robert Bentley will not impose proration and that Alabama’s city and county school systems will spend all of the $149.5 million in federal stimulus money approved by Congress last year.
“It’s going to be some dire times,” said Rep. Alan Boothe (R-Pike County). “The projections suggest that money will be real short and it’s probably going to create ‘belt tightening’ like we’ve never seen before.”
And, he’s not ruling out proration. “I think there could possibly be proration,” Boothe said. “Governor Bentley is real optimistic about the General Fund because of some revenue sources that have been identified, which could serve as a possible relief for some of the problems within the General Fund. However, I still think we’re looking at proration to some degree in the Education Trust Fund.”
The General Fund may receive an estimated $263 million windfall in fiscal 2012 from the Alabama Trust Fund, which is the state’s savings account that collects royalties paid to the state by companies that pump natural gas from offshore.
Although this is a significant sum of money, Boothe still maintains that cuts in the Education Trust Fund is something Alabama needs to prepare for.
Boothe says that the picture is still unclear as to what the revenue will actually be when the time to implement some degree of proration comes, but that he thinks proration is a reality that will have to be dealt with in the coming year.
Rolling-Reserve Budgeting is an issue, which Boothe anticipates will be brought up and discussed.
“It’s an issue that will be coming up and something that we’ll be dealing with, in hopes of coming up with a rolling-reserve budgeting formula where we would budget based on last year’s money,” Boothe said.
“That way, you don’t spend the money unless you know you have the money coming in.”
With the budget predictions as dire and gloomy as they are, Boothe foresees a number of steps that need to be taken in order to alleviate some of the financial pressure.
“I think what’s going to have to happen is every school system and everybody in the
General Fund are going to have to tighten their budgets down,” Boothe said. “We’re going to have to look at every dollar expenditure and we’re going to have to look at doing things better and cheaper. It’s going to be hard doing things the way we are based upon the amount of money that we’ve got.”
Boothe anticipates a clearer picture of the budget projections for fiscal 2012 within the next week or so, depending on the information divulged by budget experts during budget hearings over the next couple of days.
“We’ll still need a little more time in order to see what the projections are from these experts that supposedly are the ones that handle our budgets,” Boothe said.