Legislators Face Tough Choices With Ivey’s Education Funding Proposals

During her Tuesday night "State of the State" address, Gov. Ivey proposed funding the Public Education Employees' Health Insurance Plan, known as PEEHIP, while giving teachers and state employees a 2% pay raise.

The Alabama Education Association (AEA) quickly warned the proposed raise for educators isn't sufficient because it doesn't keep pace with the inflation (2.7%), leaves teachers struggling with bills and groceries, and could potentially hindering recruitment and retention of quality teachers.

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The debate now shifts to the Legislature, where lawmakers face tough budget decisions during an election year. They are being cautioned by state fiscal officers that there are challenging economic realities ahead.

Legislative Fiscal Officer Kirk Fulford told a budget committee, "PEEHIP is going to be a major driver of every discussion in the budget." Full funding of that program will run about 380 million and a half dollars. The governor recommended... about 210 million dollars.

Fulford added, "If you spent 380 million dollars of the ETF (Education Trust Fund) money out of their pot there's only 30 million dollars left. You don't have enough money to do pay raises. There has to be some sort of balancing." That is where the legislatures headache begins.

Adding to the financial pressure is another of the governor's initiatives, increasing funding to the CHOOSE Act, which extends tax credits for use for private school tuition and other non-public education-related expenses, from $180 million to $250 million.

After years of surpluses, recent drops in tax receipts mean less money is available for across-the-board raises, forcing legislators to make difficult financial trade-offs as they face the ballot box later this year.

Lawmakers say there is enough money now to pay for the governor's requests and other budget needs. But Fulford and some house members, where spending bills originate, are keeping a wary eye toward future continued federal funding cuts by the Trump Administration, which could eat up state coffers quickly.

General fund budget presentations are scheduled for Monday.