Education Trust Fund Revenue May Be Shifted to General Fund

According to the Birmingham News, key lawmakers announced two weeks ago that the state’s Education Trust Fund (ETF) may collect enough money in taxes to cover this year’s $5.59 billion in education expenses. The fund receives most of its revenue from state income tax and sales taxes, which have increased 5% since last year.

The Education Trust Fund’s growth, however, has made it a key target in the state’s attempt to shore up the General Fund. The General Fund pays for governmental functions, from prisons to the court system and Medicaid, and is facing a $400 million shortfall for 2013.  Just one week after the Birmingham News printed the ETF article, it ran another story reporting that Gov. Bentley may ask state lawmakers to unearmark ETF revenues and shift them to the state’s General Fund.

Two weeks ago, state lawmakers met at the capitol to announce the good news: ETF revenues from the past two months totaled $852 million dollars. This amount was 5% greater than the same period last year, and it showed that some parts of Alabama’s economy were on the rebound. If education revenue continued to grow, claimed lawmakers, it could fully pay for all of the state’s education expenses this year.

Now, it seems that the ETF is facing a new threat. In a speech before the Alabama Farmers’ Federation, Governor Bentley suggested moving funds from the Education Trust Fund into the state’s general fund. Later in the week, Bentley’s press secretary Jennifer Ardis confirmed the governor’s plan, saying that shifting funds was “one option that is being considered.”

Bentley’s plan to shift funds from education, however, is likely to be very controversial, and some state legislators have already spoken out against it. “I don’t think anybody would argue in this state that we’re overfunding education,” said Rep. Jay Love. Senator Tripp Pittman agreed, stating that he was “100% opposed” to any attempts to shift money out of the Education Trust Fund. “We’re making progress in our education system, showing improvements, and we need to continue those efforts in what we’re doing to give students across the state the best opportunity at a good education,” said Pittman.

Click here to read about the Education Trust Fund’s revenue growth and here to read about the controversy over the Governor’s new plan to shift funds.