Major Budgeting Changes Ahead as Responsible Budgeting and Spending Act Gains Swift Passage

A bill designed to dramatically change Alabama’s education funding process and alleviate the burdens of frequent budget proration was the first to move successfully through the 2011 legislative session and be signed into law by Gov. Robert Bentley.

HB57, The Responsible Budgeting and Spending Act, by Rep. Greg Canfield, R-Vestavia Hills, will significantly reduce the chances of mid-year budget proration, which forces districts to cut budgets for the existing year in all areas except teacher salaries and benefits when projected revenues come in below budgeted spending levels. A troublesome and counterproductive measure, proration has been required for more than one-third of the state’s last 33 education budgets.

Canfield’s bill, which was supported by the Alabama Department of Education, Alabama Association of School Boards and School Superintendents of Alabama, ends the practice of using unreliable revenue projections in determining budget allocations and bases appropriations instead on the historical 15-year growth rate of recurring revenue. In addition, the bill requires that in good years, when revenues exceed allocations, the money be moved into a Budget Stabilization Fund for use in leaner years when revenues run short. It also ensures that non-recurring revenue is not used to fund recurring expenditures. The bill will take effect for the 2012-2013 school year.

“In passing this bill, the Legislature took a big step in working to make sure Alabama always budgets responsibly,” Gov. Bentley said. “By using a more sustainable budgeting process, proration in our Education budget will soon be a thing of the past. The bill which I signed into law today provides sustainable growth and spending for the Education Trust Fund.”

Although the bill is not without detractors, it moved through the legislative process in the fewest days possible and is proclaimed by many as the start of a new era in state budgeting that will mean greater certainty and stability for education in Alabama.

While supporters maintain the measure is long overdue and will “enforce discipline” in the legislative budgeting process, critics claim the bill will prevent lawmakers from meeting important school needs even when the money is available to do so. Sen. Hank Sanders (D-Selma) said passage of the bill means “We will start slipping in a hurry.”

Sen. Dick Brewbaker, R-Pike Road, supported the measure but wanted to delay implementation for a year. “I’m not sure we understand the ramifications of everything we are going to do,” he told the Decatur Daily.

Sen. Brewbaker’s concerns were shared by others who desperately want to shield state schools from further proration pains, but are concerned, under the constraints of the new bill, about the ability of schools to recover from the effects of recent recurring budget cuts.

“It certainly would be better than proration,” Lauderdale County Schools Superintendent Bill Valentine told the Decatur Daily. “I don’t think it will allow us to rebuild what we lost in repeated proration since 2007. Time will tell if this is right or not for the children.”