MONTGOMERY, Ala. — A memo being circulated by Alabama State Superintendent Tommy Bice Tuesday is drawing the criticism of conservative lawmakers who say Bice’s characterization of legislation before the State Senate is untruthful.
The bill in contention is Senate Bill 30, which moves $225 million in Use Tax revenue from the Education Trust Fund to the General Fund.
The Use Tax is a sales tax paid on items bought in other states for use in Alabama.
In the memo, sent to members of the education community, Dr. Bice says the bill threatens to impose an “immediate 4-5% proration on Alabama public schools,” a “devastating” cut to public education.
“That is an absolute lie,” Representative Ed Henry told Yellowhammer Wednesday morning. “Moving the Use Tax has nothing to do with what has been appropriated for education. There is, in this year’s budget alone $120 million of excess funds that will go into a savings account. Projected for FY2016, which is when they’re talking abut pulling the use tax the projections are in excess of $250 million that will not be spent.”
Together, Rep. Henry argues, there is a projected excess of between $350-400 million, $225 million of which would be moved to the General Fund by the bill.
Proration typically occurs when actual revenues are less than what was projected during the budgeting process. The Rolling Reserve Act, passed in the first year of Republican control of the legislature, curbs the danger of proration by capping the amount of money that can be spent by education in growth years and putting that money into a savings account. In years where revenues do fall short, the reserves can be used to shore up the difference.
Henry says calling SB30 proration is disingenuous and simply a tactic to “scare the education community into pushing their legislators against voting for the bill.”
“It’s the same kind of stuff we’re seeing out of Washington DC,” he added.
Superintendent Bice replied to Yellowhammer News’s request for comment Wednesday afternoon.
“My efforts on behalf of our 740,000 public school students are most genuine as any removal of funding for the coming year without a plan to replace those funds will result in diminished services for our children,” he wrote. “As their advocate and leader I would be remiss to not alert those who teach them, their parents and their communities to this potential negative impact. I do, however, have full confidence and an unwavering commitment to work with the legislature on a long-term solution and have read several potential plans I could support, just not the one contained in SB 30.”
The climate of frustration in Montgomery grew after a tumultuous day in the Alabama House Tuesday where a tobacco tax—long considered the most politically palatable of the taxes proposed—narrowly failed in committee, leading House Ways and Means-General Fund committee chairman Steve Clouse (R-Ozark) to propose a budget cutting $156 million from Medicaid.
There have been several taxes suggested to “backfill” the revenues from the Use Tax, but after the failure of the tobacco bill the future of any tax increasing measures is increasingly uncertain
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— Elizabeth BeShears (@LizEBeesh) January 21, 2015
