Future grim for Gen. Fund, Edu. budgets - WSFA.com Montgomery Alabama news.

Future grim for Gen. Fund, Edu. budgets

Senator Hank Sanders says the financial situation is the worst in his lifetime. Senator Hank Sanders says the financial situation is the worst in his lifetime.
One suggestion is to make teachers pay more for health insurance. One suggestion is to make teachers pay more for health insurance.

Written by: Eileen Jones - bio | email
Posted by: John Shryock - bio | email

MONTGOMERY, AL (WSFA) - It's impossible to paint a pretty picture when it comes to the state's financial future. On Thursday, grim predictions for the General Fund budget were made, a day after Governor Bob Riley assured the people there would be more reductions in the education budget.

The chairman of the state senate's education budget committee, Hank Sanders, characterizes it as the worst financial situation in his lifetime.

In January, just five months from now, the gavel will signal the beginning of another legislative session and it won't be an easy three and a half months.

"We're starting off with $150 to $160 million less than we anticipated," said Sen. Sanders (D-Selma).

The problem is that the education budget for 2009 will most likely drain the Rainy Day fund, and that will mean no safety net for 2010. On top of that there will probably be more cuts coming.

"If I knew what cuts I was going to make I would tell you..." Sanders said, "and the reason for that - people would immediately begin mobilizing to make sure you don't make them..." Sanders went on to say he has not started focusing on the cuts, however.

To avoid any more cuts in 2010 one suggestion is to ask teachers to pay more for their health insurance. Right now they pay only $2.00 for individual coverage. 

"That's actually like reducing teachers' salary, and in these difficult economic times when people are not getting raises, it is very difficult to reduce their salary," Sanders believes.

Another suggestion is to increase taxes. "Unless you find some way to tax something that's not being taxed like gaming or something that's not being taxed at the state level then you're not likely to have any income," he went on to say.  

That topic always causes a stir with legislators, but while they and educators figure out what they're going to do about 2010 and 2011 budgets Sanders says the outlook is very scary.

"It's like stepping off in some water that you think is shallow, and you just keep going down and down and down. And after a while you're out of breath, and you don't even know where the bottom is."

The Rainy Day fund is helping the state make it through the rest of this fiscal year, but trouble starts again in October when the 2010 budget begins and it's anticipated there will be no rainy day money left over. There will be some federal stimulus funds to make it through, but Sanders says not enough to avoid cuts.

In 2011 there will also be some stimulus money, but if the economy continues going south Sanders predicts budget cuts could become drastic. 

Meanwhile, the outlook for the General Fund isn't much better. The governor says the decline in state revenues means he will likely have to cut appropriations to state agencies again in 2010 and to continue a hiring freeze and other cost-cutting measures for state departments.

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