MONTGOMERY, AL (WSFA) - Alabama Governor Robert Bentley declared proration on the state's education budget Monday because of revenue shortfalls. The governor declared 3% proration in the FY 2011 Education Trust Fund.
Bentley said he also plans to declare 15% proration in the state's General Fund, after first working with the Legislature for supplemental appropriations to protect priority agencies that provide necessary and critical services.
"I am very disappointed Governor Bentley found it necessary to declare a three percent reduction in school funding for this year," said Montgomery Public School Superintendent Barbara Thompson. "We had been told proration might not happen. That means we will face an additional $4.5 million in cuts before the end of September. With this, state funding for Montgomery Public Schools has been reduced by about $37 million in less than two years. I am grateful the board accepted my proposal for spending reductions – including the consolidation of schools. But even with those closings, we must now take more drastic measures. We are now being forced to cut beyond the bone."
"We have warned school systems of this possibility," said Dr. Joe Morton, Superintendent for the Department of Education. "Proration is never welcomed news. However, getting the news now rather than later in the school year helps to spread the pain over 7 months, rather than some shorter time period. My fear is that even more school systems will have to borrow more money to make it to the end of the fiscal year. This, along with anticipated budget cuts in the upcoming legislative session will push more systems closer to the brink of insolvency. These are perilous times in K-12 education."
The governor's office issued a news release stating that after thorough analysis by the Alabama Department of Finance and the Department of Revenue, estimated revenues to the State General Fund for fiscal year 2011 are insufficient to fund all appropriations at their current levels. With one time federal stimulus money now depleted, Alabama is left with the loss of hundreds of millions of dollars in both state budgets. The current Education Trust Fund budget has a $165 million shortfall while the current General Fund budget has a $110 million shortfall.
"Both our Education Trust Fund and our state's General Fund budgets are based on unreliable revenue projections," said Governor Bentley. "Now, five months into the 2011 Fiscal Year, it is clear that there is not enough revenue to sustain either budget. Proration is necessary to balance the budgets."
"The taxpayers expect us to live within our means just as families and businesses are forced to do," said Finance Director David Perry. "No one is pleased that we have a revenue shortfall which requires proration in the budgets that were passed last year, but mid-year cuts are necessary for Alabama to meet its constitutional obligation for a balanced budget."
Proration in the Education Trust Fund is effective immediately.
INFORMATION SOURCE: Governor Bentley's press office
MONETARY IMPACT OF 3% PRORATION ON SCHOOL DISTRICTS
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