Senator Trip Pittman (R-Daphne) has introduced SB248 which sets forth a proposed amendment to the constitution incorporating the current Rolling Reserve Act. The proposed legislation requires that education appropriations each year be limited by a cap that is determined by an average of the actual revenues of the highest 14 years in the prior 15 years.
Any actual revenues received in the Educational Trust Fund for the year in excess of the cap will be distributed first to pay back the Education Rainy Fund housed in the Alabama Trust Fund (which should be fully repaid within this fiscal year) and then the remainder will be allocated 70% to a new proration prevention account and 30% to a capital account to be used for school construction.
The bill was co-sponsored by 21 members of the Senate and is being regarded as a Senate Republican Caucus priority bill. The bill has been assigned to the Senate Finance & Taxation Education Fund Committee chaired by Senator Pittman.
Senator Pittman continues to demonstrate his capable leadership, especially in the area of fiscal responsibility. AFA characterizes the Rolling Reserve Act as one of the three most important fiscally responsible initiatives ever instituted by the State of Alabama (along with the balanced budget requirement in the constitution and the formation of the Alabama Trust Fund that theoretically protects oil & gas royalty income in perpetuity).
The Rolling Reserve Act cap is in peril in the development of the FY16 Education Appropriation. Because it is currently only a statute, it only serves as a planning tool until the next legislature decides to override its requirements.
Putting it in the constitution will preclude this override. The Governor’s proposed FY16 Education appropriations, if enacted, would override the cap.
Representative Ed Henry (R-Hartselle) is expected to carry the legislation in the House.
Please contact your legislators and ask them to support this legislation.