State budgets appear to be in better shape for 2014, says Legislative Fiscal Office

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The Alabama House of Representatives’ chamber in the State House.

The state’s two budgets appear to be in markedly better shape than they were last year, according to a presentation Tuesday from the Legislative Fiscal Office. That could mean a small pay raise for education employees in the state.

Norris Green, director of the LFO, told lawmakers and officials in the Capitol Auditorium that they were expecting an extra $237.6 million in in fiscal year 2014 in the state’s $5.4 billion Education Trust Fund, which pays for most education funding in the state. The perpetually troubled $1.6 billion General Fund faces a shortfall of $28 million in FY 2014. The next fiscal year begins on Oct. 1.

“We had huge problems last year,” Green said. “It’s not going to be as bad today. We’re not looking at the big problems we did last year.”

Overall, appropriations requests are expected to be $959 million higher in the Education Trust Fund in 2014, and $263 million higher in the General Fund.

Sen. Trip Pittman, R-Montrose, the chairman of the Senate Finance and Taxation Education committee, which oversees the ETF, said the surplus could open the door to a 1 to 2 percent pay increase for teachers.

Pittman said he appreciated the work of teachers and employees, who have not had a raise since 2008, but added it would be better to have a sustainable pay increase. A one percent pay increase for education employees is estimated to cost about $37 million.

“We’d like to do more,” he said. “But governing is governing. At the end of the day, we’ve got to govern. We’ve got to be fiscally responsible.”

Pittman said he would like to put a line-item in for a $110 million repayment of the ETF’s rainy day account. In fiscal year 2009, the state took over $437 million from the account to avoid proration. About $14 million has been paid back so far; the remaining $423 million must be returned by FY 2015.

Green also said there was a shortfall of $21 million in the current General Fund budget, which he called “manageable.”

The Legislative Fiscal Office estimates the total size of the Education Trust Fund in 2014 to be about $5.785 billion, and the General Fund to be about $1.65 billion. Marquita Davis, the state’s finance director, estimates the ETF at $5.82 billion, and the General Fund at about $1.7 billion.

Davis praised the state agencies for their budget requests, saying most understood the fiscal realities.

“Most departments really tried to be conservative,” she said. “They didn’t add a lot, they didn’t try to build buildings. Education came in and said, ‘These are the immediate needs.’ None of the needs were outside the line of normal and appropriate.”

– posted by Brian Lyman

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