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October 8, 2008

Alabama's State Budget & Education Spending Forecast looks "Grim"

The Birmingham News:

Hubbert said he expects Education Trust Fund revenues to fall short at least 5 percent, or at least $318 million, of what the Legislature budgeted for the fiscal year that began Oct. 1. As bad as that sounds, it could get worse. Hubbert said if the economy continues to slide, the shortfall could top $400 million.

Trust fund revenues already are more than $200 million below what lawmakers expected. That's mainly because tax collections for the fiscal year that ended Sept. 30 grew $146 million less than forecast, and Riley last year drained a $440 million reserve to avoid education spending cuts. Lawmakers had expected to have from $64 million to $109 million left in the reserve fund to spend this year. Instead, that money is gone.

The Legislature didn't help matters by passing a $6.36 billion education budget for 2009. That amount exceeds by $102 million the average revenue forecasts of the state finance director and the Legislative Fiscal Office. Essentially, lawmakers decided that cutting almost $370 million from the $6.7 billion education budget from 2008 was hard enough, and they didn't want to carve another $100 million-plus for 2009.

Tax base growth is certainly not a given at the moment. Related: November 2008 Madison School District referendum notes and links.

Posted by Jim Zellmer at October 8, 2008 8:52 AM
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