Let’s Look Closer at the Education Trust Fund Budget….

The ETF budget will be discussed this week in the legislature.  The Education Trust Fund (ETF) budget is where all the state money for K-12 education in Alabama comes from.  Remember, school districts’ budgets are made up of state, federal and local money.  The ETF is the state piece.  Every year, the state legislature puts a budget together and then folks come from far and near (mostly near, in Montgomery) to stake their claim to some of the nearly-$6 billion that is doled out through this process. I am using the Governor’s recommended ETF budget for FY14 throughout this discussion.  It is the only spreadsheet that is available that can be easily interpreted at this point.  Here is the budget submitted by the House.  Here is the budget submitted by the Senate.

There are a few facts that you need to know before we delve into the FY14 ETF budget.  First, remember that FY means Fiscal Year, which runs from October 1 of one year to September 30 of the following year, which is the year for which the budget is named.  So FY14 means the time period October 1, 2013, to September 30, 2014.

Second, and this really may be the most important thing to remember about budgets:  A budget is a policy tool.   Budgets show priorities for our state government.  The Governor’s proposed spending for K-12 education accounts for 68.84% of the entire ETF budget.  Nearly $6 billion.  Spending for education is 51.16% of all state money (which includes the General Fund and all the other various funds where money is stored) for FY13.  For K-12 alone, the percentage is 37.78% [Source: A Legislator’s Guide to Alabama’s Taxes 2013, p. 380.]

[Source: Presentation to Legislature on Alabama’s Financial Condition, Legislative Fiscal Office, February 5, 2013]

Third,  the ETF doesn’t only fund pure educational pursuits.  Nope.  There are lots of “other” agencies and pursuits that are funded through the ETF.  In fact, this year, the proposed “other” amount jumps from 4.6% to 6.4% of the ETF.  Hmmm.  You may recall there was some talk of combining the State General Fund (“General Fund”) budget and the ETF last year, but that was quickly abandoned.  It is worth taking a look at the other agencies and types of activities that are funded through the ETF.  I am NOT claiming that these agencies or pursuits are not worthy of state funding.  Nor am I making any judgement about any of these agencies or pursuits.  My only intention is to make you aware of the various types of activities that are funded through the ETF.  Until I took a long look at the ETF budget many years ago, I thought that the ETF funded only K-12 and higher education.  Most folks are under that impression, I’ve learned.  So consider this an FYI.

A Few Words of Caution, Please

As I call your attention to a few of these agencies and pursuits, I ask one thing.  Please do not say “but that’s only half a million dollars…just a drop in the bucket.”  Or “but that’s so little money compared to what we spend on ______”.  Each and every dollar of a state government budget should have purpose and planning behind it.  I won’t bore you with the history of government budgeting, but suffice to say that lessons learned show that the most effective spending is targeted spending, not simply a “well, they got $100,000 last year and they spent it all, so let’s give them $125,000 this year”.  This money that is being budgeted comes from the people of Alabama and we must trust our elected leaders to dole out appropriate amounts to those agencies and others who improve the lives of Alabamians.  We often feel helpless, but we actually do have a voice.  We owe it to ourselves to learn at least a little bit about how our money is spent.  Read on to gain that little bit of knowledge.

Other Agencies and Activities Funded Through the ETF

Here’s is a quick sampling of monies requested for FY14:

Examiners of Public Accounts – $6.2 million – From their website: “The Department of Examiners of Public Accounts is the independent legislative audit agency for the State of Alabama. The Department has the authority to perform audits of the accounts of all entities receiving or disbursing public funds. We are part of the Legislative branch of state government, and are independent of the Executive and Judicial branches of state government, as well as all local governments in the State.” They do audit county boards of education as part of their function, but they do much more than that.

Alabama Law Institute –  $567,000 (up from $257,000 in FY12) – From their website: “The Alabama Law Institute, created by an act of the Legislature in 1967, is a legislative agency that operates with volunteers. Our purpose is to clarify and simplify the laws of Alabama, to revise laws that are out-of-date and to fill in gaps in the law where there exists legal confusion. Our diverse membership includes members of the Alabama State Bar Association, the judges of the Alabama Supreme Court, courts of appeals, and circuit courts, federal judges domiciled in Alabama, full-time law faculty members of law schools and lawyer members of the Legislature.”

The Legislature – $1,000,000 (up from nothing in FY12).  No idea about this one.

Department of Archives and History – $4.8 million (up a million from FY13) – From their website: “We tell the story of the people of Alabama by preserving records and artifacts of  historical value and promoting a better understanding of Alabama history.” The link takes you to their strategic plan.

Governor’s Office of Faith-Based & Community Initiatives (Serve Alabama)- $250,000 (up from $128,475) in FY12.  From their website: “The Governor’s Office of Faith-Based and Volunteer Service works to increase an ethic of service and volunteerism in the State of Alabama, strengthen the capacity of Alabama’s faith and community-based organizations, and promote collaboration among individuals and organizations striving to meet some of the greatest needs in our state.”

Board of Optometric Scholarship Awards – $107,000 – From a document I located about the Board:  “The mandated function of the board is to establish and provide scholarships and loans to further optometric training in pursuance of an optometric degree at the UAB School of Optometry. The board is one of the agencies responsible for performing the Client Services function of Alabama government.”

Sickle Cell Oversight Commission – $1.3 million (funding basically unchanged from FY12) – I couldn’t find an official web site, but I did find information about some of their awareness activities here.

Space Science Exhibit Commission – $480,000 – I couldn’t find an official web site, but I found this group who writes about the Commission.

Supercomputer Authority – $4.8 million – From their website: “The Alabama Supercomputer Authority is an Alabama public corporation with the mission to develop and operate the statewide Alabama Research and Education Networkand the Alabama Supercomputer Center . The Authority has a 20-member Board of Directors which sets policy and direction. The Board is appointed by the Governor, Lieutenant Governor, Speaker of the House, and Council of Presidents. Funding for the Authority comes from the Alabama Education Trust Fund, from fee for service, and from federal contracts and grants. Services are provided statewide by the Authority staff and through a professional services and facilities management contractor, Computer Sciences Corporation.”

See what I’m saying?  These are just a few of the many different appropriations.  The full list and budgeted amounts are below.  Why are all of these agencies and pursuits funded from the ETF?  Why has the Governor asked for Troy University to be given an additional $5 million (over and above their regular appropriation) this year?  Why is Auburn University on the list to receive an additional $1 million, half for their “Cyber Security Center” and half for their “Small Business Incubator”, while the $1 million allocated for gifted funding is nowhere to be found in this year’s request?

NOTE: For more complete information, consult the 2012 Budget Fact Book (the most recently-dated one available) from the Legislative Fiscal Office to learn the details of how these agencies are funded.  Some receive money from the General Fund and the ETF.  The Legislator’s Guide to Alabama’s Taxes 2013 is also a great resource.

Those “Small” Amounts Add Up

It may be easy to say “those are such small amounts”, but all of those amounts really add up.  Our educators are nickel-and-dimed on a regular basis, shopping sales and using innovative ways to fund classroom needs.  Our PTAs and PTOs and booster clubs are constantly in fundraising mode, sometimes to produce basic materials for our children.  The saying “pennywise and pound foolish” comes to mind, but once again, I don’t want to claim that any of these appropriations are unnecessary or foolish.  Just that they are there and most folks don’t know about them.  So now you know.  Click the image below to make it larger.  Here’s a link to download a PDF of the image below.  Here’s the list for FY13 (our current fiscal year).

Look over the document. If you have questions, contact your legislator.  Ask why this money or that money is being allocated.  Our elected leaders should have good answers for us.  Let me know if you have any questions.  Post them here or on the facebook page.