Gov. Robert Bentley Friday morning signed the 2015 education budget, passed by the Alabama Legislature last week after a struggle between the Governor and legislative leaders over a teacher pay raise.
The budget does not include the two percent wage increase Bentley sought. However, the Governor said Friday he reserved the right to call the Legislature back into special session later in the year, if revenues come in to cover the cost of the raise, estimated at $76 million.
Bentley said at a press conference Friday morning that teachers’ “salaries have been cut” due to increased retirement costs. But the Governor added that he did not believe the votes were currently available in the Legislature to pass a two percent pay raise, and cited the need to get a final document to local districts to allow their planning to go forward.
The Governor said the office would continue to review revenues as they come in each month, and could come to a decision on a special session to address a pay raise late in the summer or early in the fall. Bentley said his office “could continue to work” on lawmakers to drum up support.
“I’m going to continue to push for it,” he said. “If we don’t get it this year, we’ll push for it next year, if I’m here.”
As passed by the Legislature, the $5.9 billion budget includes a $64 million increase for the Public Education Employees Health Insurance Program (PEEHIP), which may allow the board to close a looming deficit without raising premiums or co-pays for those enrolled. It also includes a $10 million increase for pre-kindergarten programs and money to provide 70 additional teachers, far fewer than the 450 new positions the Alabama State Department of Education sought.
The budget also includes slight increases for transportation and daily operational expenses at schools.
“We are pleased to have an answer, so our schools can plan for the upcoming school year,” State Superintendent of Education Tommy Bice said in a statement.
Revenues proved one of many points of argument between Bentley and legislative leaders in the final days of the 2014 legislative session. Bentley has insisted that there was adequate state revenue to fund both a pay raise and the PEEHIP increase. But legislative leaders, showing more pessimism about the state’s economy, said the state would have to choose between one or the other.
Lawmakers were also concerned about making the state’s Rainy Day Fund whole. The state emptied the fund of $437 million in 2009 to offset the effects of proration. The fund, which is still owed $163 million, must be paid back by July, 2015.
“We have made significant progress in paying down the debt since taking office in 2010, and the appropriation in this year’s budget will ensure that more than 70 percent of that debt is repaid by the end of the next fiscal year,” Senate President Pro Tem Del Marsh, R-Anniston, said in a statement released shortly after Bentley’s announcement.
Bentley announced on the last day of the session Thursday that he would amend one of two bills to include a teacher pay raise, and make changes to the education budget to fund the raise. In response, both chambers passed the education budget that evening and adjourned before the Governor could transmit his changes.
The moves sunk a number of pieces of legislation on the final day, including changes to the state’s Open Meetings Act and a bill that would have established a central database to track pay day loans and enforce a $500 limit on the pay day loan debt individuals can have out at any one time.
“There were some very good bills that failed, and they failed because the Legislature adjourned five hours earlier than they needed to adjourn,” the Governor said.
How a pay raise would be paid for was not clear. Spending in the Education Trust Fund is subject to the Rolling Reserve Cap, which limits the budget’s increases to a certain percentage based on a 15-year average of revenue growth in the fund. Both Bentley’s initial budget and the final version approved Friday include spending above the cap.
Bentley’s original proposal would have funded the teacher pay raise and PEEHIP funding with $92 million in spending outside the cap; the final budget developed by lawmakers includes about $23.5 million outside the cap, mainly to fund settlements over the Prepaid Affordable College Tuition (PACT) program. Lawmakers could also spend an additional $27 million or more over the cap to address the Rainy Day Fund.
Marsh and House Speaker Mike Hubbard, R-Auburn, both opposed calling a special session, saying they supported the education budget as passed. Without their support, Bentley would likely have faced difficulties getting a pay raise through: The Governor can set the agenda for a special session, but cannot compel legislation to come to a vote on the floor.
Hubbard said in a statement that he applauded the Governor “for signing this conservative and fiscally responsible budget.”
Democrats pushed hard for a pay raise. House Minority Craig Ford, D-Gadsden, said in a statement that Bentley’s decision to sign the budget meant his support for a teacher pay raise “was more election year rhetoric.”
“There is no reason to delay calling a special session, other than to allow Republican legislators to campaign in their primaries and then come back this summer to try and win back educators’ votes before the general election,” the statement said.
Bentley insisted that his support was a matter of principle, and cited his support for a number of items in the budget, particularly funding for workforce development. But adding the wage adjustment, he said, would have made it a “perfect” budget.
“If you take out the two percent pay raise, we had a good session. We really did,” he said. “But you can’t take that out.”
A special session would cost anywhere between $100,000 and $500,000, according to the Legislative Fiscal Office, depending on its length.
– posted by Brian Lyman