With another $2 billion surplus anticipated in the state budget, we’re happy that Gov.-elect Bobby Jindal is talking cautiously about state revenue. There’s no telling, he said, how long the revenue increases will last.
We think that’s wise. State revenue is booming because of hurricane rebuilding and in part because of the high price of oil. Both can be highly variable, and the only confident prediction is that eventually the tide of federal aid for the Gulf Coast will recede. Someday.
Jindal said he wants the clearest possible economic forecast to underpin his first budget. He named Angele Davis as commissioner of administration, his chief budget officer. She has experience as deputy commissioner in Gov. Mike Foster’s Division of Administration, when the budget scenarios weren’t as rosy as they are now.
After an election year in which Jindal and candidates for the Legislature made expansive promises of both tax cuts and expenditure increases in areas such as highways and education, the budget will be, as longtime budget analyst Bob Keaton said, “the most significant policy document of state government.”
Keaton told Jindal’s transition committee on government reform that the budget has seen some growth, but much of today’s boom is because of hurricane recovery-related revenue. He noted that Louisiana has massive future obligations, even bigger than today’s boom in revenue.
The state owes $11 billion, for example, in retirement payments that under the constitution will be made during the next 22 years, “costing untold amounts of interests and carrying charges,” Keaton said. Investment of some of the surplus now to pay down those liabilities could reap huge financial benefits down the road for the state.
This idea is not new; it was one of the uses Gov. Kathleen Blanco considered for surpluses this year. Nothing was done. Administration officials said there was no legislative enthusiasm for using part of the surplus on the retirement debt.
Vast amounts of money also must be spent on highways and transportation, but those purposes — even in years of big surpluses — already have tended to crowd out other legitimate uses for money. With more than $1 billion in deferred maintenance and repairs needed on college campuses, a Blanco proposal for attacking the problem in a big way was reduced in the legislative process to $45 million, and that involved patching together $30 million from a surplus and finding $15 million from another pot of money.
In ballpark figures, Keaton said, the state’s general fund is going up by $600 million or $700 million a year because of hurricane recovery, rather than a more typical growth of $100 million to $150 million a year.
All of the general fund growth is going into recurring expenses, he noted. Once the economy slows, growth will be difficult to sustain — or even maintain.
Changing the way business is done in state government might seem an abstract goal, given the flush state coffers these days. But we hope Jindal will look for opportunities to invest surpluses in ways that will improve efficiency in state government, looking toward the day when budgets again will be tight and saving money in state government once more will be an urgent priority. ### |
THE ISSUE: Gov. Bob Riley's ambitious pre-K plan is a monumental step forward in education in Alabama, and the best investment the state can make with our dollars.
First, it was the highly acclaimed Alabama Reading Initiative. Then came the Alabama Math, Science and Technology Initiative. Now, it's prekindergarten.
From that promising lineup, we could easily get the impression Alabama might actually be serious about improving education and giving children in this state the best possible chance to succeed.
Nothing does that better than pre-K. Last Thursday, Gov. Bob Riley announced the latest initiative: an ambitious expansion of pre-K for 4-year-olds. Based on the growing body of study about pre-K programs across the country, it could prove to be the smartest of all the state's school reforms.
Studies show children who take part in quality pre-K programs do better in school, are more likely to graduate and go to college, and less likely to become teenage parents or commit crimes. In fact, in just about every measurable quality-of-life factor, including income, good pre-K programs that get children off to a good start in education make a positive difference.
Riley's program, "First Class: Alabama's Voluntary Pre-K Initiative," represents a major investment in an area in which we badly trail our Southeastern neighbors.
Tennessee, for example, spends $80 million a year on pre-K; Arkansas, $111 million; North Carolina, $140 million; Georgia, $325 million; and Florida, $367 million.
Alabama this year will spend just $10 million on its pre-K programs, covering fewer than 2,400 of the state's 60,000 4-year-olds - about 4 percent - in 131 sites around the state. And that in itself is a big improvement over last year, when the state's $4.6 million provided funding for only 2 percent of 4-year-olds.
The Riley plan, fashioned by the Governor's Council on Pre-K Policy, would triple pre-K spending next year to $30 million. That would reach an estimated 7,600 students - 13 percent - in 400 sites.
Riley doesn't stop there. The following year, the budget, the number of children served and the number of state-funded pre-K sites would all double - to nearly $60 million, reaching 15,200 children in 800 locations.
And in the third year of the expansion, Riley wants the state to spend more than $80 million to provide pre-K for nearly 21,000 children at 1,105 sites.
To put that in perspective, that's more than an eightfold increase in the number of 4-year-olds in state pre-K programs in only three years.
Riley and his policy council deserve a sustained round of applause for putting on the table an aggressive program to not only catch Alabama up to some of our Southern neighbors that for years have invested heavily in early-learning programs, but to go them better in one important area - quality.
Alabama's pre-K program, though very limited in the number of students served, wins accolades for quality. This year, the National Institute for Early Education Research said Alabama was one of only two states - North Carolina is the other - to score a perfect 10 out of 10 on its quality benchmarks. Those benchmarks cover such things as teacher qualifications, class sizes, staff-to-child ratios, health screenings, meals and monitoring.
In short, Alabama knows how to do pre-K right. The problem is too few children get this right kind of education.
Riley's plan greatly increases access to quality pre-K. When fully implemented in 2011, about one-third of the state's 4-year-olds will be in state-funded pre-K. While that figure is far short of the nearly 50 percent of students served in Florida or the 70 percent in Georgia, it should be noted that many parents who can afford it already have their children in private or church preschool programs, while some low-income children are in federally funded Head Start. Alabama's program is designed not to supplant those preschool programs.
Plus, Florida's and Georgia's programs don't approach the quality of Alabama's program in meeting NIEER standards.
Riley says the incremental increase under First Class is a way to grow the program while maintaining quality. "It's going to be a long process; this is not something that is able to be done overnight," Riley said in announcing the program.
One aspect of Riley's plan that might prove controversial is that it requires parents to pay some of the cost of pre-K. That range from a small fee of $40 a month for children of poor families to up to $300 a month for more affluent families. Still, even for those who would pay the full $300 a month, it's less than the average cost of day care.
Make no mistake about it, this is a monumental step forward for education in Alabama.
"There are few investments the state can make that will pay off as well in the long run as voluntary pre-K," Riley said. "In the short term, pre-K helps guarantee students enter school ready to learn. The long-term results are endless: higher graduation rates, lower crime rates and reduced welfare rolls."
The one sour note last week game from state teacher union boss Paul Hubbert, who questioned whether the state can afford to pay for it from the state education budget, which also pays teachers' salaries and benefits.
But as Riley noted, finding $30 million next year in an education budget of $6.7 billion - less than one-half of 1 percent - isn't that hard of a trick.
On the heels of the success of the Alabama Reading Initiative and the expansion of the similar Math, Science and Technology Initiative, as well as his distance-learning program, Riley said he doesn't want "Alabama to ever be the last in education again."
He sounds like he's serious.
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Gov. Sarah Palin wants to set aside $2.6 billion of projected oil revenue to give school districts across the state a funding boost each of the next three years.
“It’s very encouraging,” said Mike Fisher, the chief financial officer for the Fairbanks North Star Borough School District. “I think it really shows the governor’s support for education.”
Under the plan, unveiled Friday, Palin would increase the base student allocation, the amount of money the state gives each district per student, by $200 each year for the next three years. By fiscal year 2011, the per-student funding would be $5,980 compared to this year’s $5,380.
Palin also said she wants to see more money going to districts to cover the cost of teaching intensive-needs students — children with learning disabilities or mental or physical handicaps so severe that they require intense, and expensive, personal attention throughout the school day.
“It’s going to be the state’s oil wealth that will cover a greater share of the cost of teaching those special-needs kids,” she said.
The state gives school districts $26,900 per intensive-needs student. Palin’s proposal would increase that to $50,220 in 2009, $63,580 in 2010 and $77,740 in 2011.
Fisher said the proposal would be a much-needed relief to school districts, which often have to spend many times more than the state allotment per student to give special-needs kids the services they require.
“We provide the services required whether or not we can afford it,” he said. “It’s a federal mandate.”
In the past, Fisher said, the Fairbanks school district has had to pull funds from other sources to help pay for intensive-needs programs.
Palin also proposed implementing a three-year partial phase-in of the district cost factors — a complex and controversial formula developed by the Institute of Social and Economic Research that results in small, rural school districts receiving more money from the state per student than larger, urban districts. The governor’s proposal would not fully implement the cost factor; by 2011, it would be 75 percent implemented.
Sen. Gary Wilken, R-Fairbanks, an outspoken critic of the ISER study behind the district cost-factor formula, said that was the only “wart on the whole package.”
“It’s a money-grab (by rural legislators and school officials), and I’m a bit disappointed that the governor bought into it,” he said.
Other than that, Wilken said he was pleased with the governor’s proposal.
“She’s treating K-12 with the respect that it should have,” he said. “This is a step in the right direction. We have the money. Now we just have to have the political will to do it.”
Fisher said he appreciated that the governor’s funding proposal was for more than a year. Typically, he said, the school district only knows how much money to expect from the state on a year-to-year basis.
“If we can have an idea of what our funding will look like over two or three years, it will give us an opportunity to plan,” he said. “This is very encouraging. It gives us at least a three-year window to look at.”
Palin said that by setting out a financial blueprint for education several years in advance, it will free up policymakers and school officials to focus on more important issues.
“I believe it is critical to shift the annual debate from how much we are going to spend on education to how we can be innovative and work to improve the outcome of our education system,” Palin said. ### |
Texas Governor Rick Perry was elected Chairman of the Republican Governors Association today as the RGA concluded its successful three-day Annual Conference in Dana Point, California. Governor Perry succeeds Georgia Governor Sonny Perdue. Missouri Governor Matt Blunt was re-elected Vice Chairman. As a testament to the confidence the Governors have in him, Governor Blunt will be the first Governor ever to serve two terms as Vice-Chairman.
The election of Governor Perry comes at the end of a year that saw the RGA emerge as a key momentum builder for the Republican Party. RGA took two out of three races this year and picked up its first Governorship since 2004. RGA has also out raised the Democratic Governors Association by a 2-to-1 margin.
“Governor Perdue and Governor Blunt did an outstanding job getting RGA ready for the next three years,” said Governor Rick Perry. “Republican governors are committed to transforming our nation from the ground up and states are where the creativity and innovation exist to address the challenges that face our nation.”
This past year was the first year of RGA’s four year plan that will give it the opportunity to win back the majority of Governorships in 2010. The four year plan includes strategic budgeting, candidate recruiting, aggressive fundraising, staff continuity and a commitment to helping Governors develop innovative ideas to lead their states forward.
Earlier this year the RGA hosted a Senior Staff Retreat where 34 senior staff members of Republican Governors discussed important policy issues with Karl Rove, Newt Gingrich, Secretary Mike Leavitt and other experts.
In addition to the election of Governors Perry and Blunt as Chairman and Vice Chairman, Governor Haley Barbour was elected Finance Chair, Governor Mark Sanford was elected Dinner Chair, and Governor Sonny Perdue was elected Recruiting Chair.
This is the first time that RGA has a Governor as Chairman of its Finance Committee and is also the first time that it has a Recruiting Chair. Improved fundraising and aggressive recruiting of the best candidates are key components of the four year plan.
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