What is the Budget Reform Task Force Studying?

The Alabama Legislature’s Joint Legislative Task Force on Budget Reform met for a third time this week in Montgomery continuing its search for solutions to Alabama’s perennial problems with crafting budgets.

The bipartisan panel of state senators and representatives has now met three times and each time has made sure to clarify what they are and what they aren’t doing:

They are a task force studying the state’s long-running budget problems, looking for ways to improve the process. They hope to produce a report to the Legislature by the opening of its 2017 session.

They are not a legislative committee.

They are not drafting legislation.

The assurances haven’t prevented the Task Force meetings from drawing a nervous crowd. Budgets matter. Not just to government agencies, but also to non-governmental service providers, and to individuals and businesses that pay taxes and receive services.

Budgeting in Alabama has been extremely difficult in recent years due to a seemingly intractable mismatch between the level of revenue available and the amount of money agencies say they need to maintain services.

That mismatch has left the state lurching from budget crisis to budget crisis, resulting in multiple legislative special sessions.

While the solutions reached have kept the government functioning, they haven’t solved fundamental problems. As recently published year-end results for 2016 show, state finances are still under strain. The state continues to depend on non-recurring revenues to balance the budget. When that revenue disappears, the growth of expenses is likely to continue to outpace available revenue, leading to future budget crunches.

In an attempt to further understand these long-term problems and explore possible improvements, the Task Force started with the basics.

In September, the 14-member bipartisan panel of House and Senate members heard what amounted to a Budgeting 101 presentation from the Legislative Fiscal Office. The presentation explained:

1. Why we have two budgets (the General Fund and the Education Trust Fund)

2. How our tax revenues compare to other states

3. How our budget process works

4. How it compares to other states

5. Alternative approaches to budgeting other states use

6. Revenue and expenditure challenges on the horizon

7. Budget and management improvements already underway

The Task Force has formed five study groups, tasked with delving into five areas of interest:

1. Unearmarking: Alabama earmarks more of its tax revenue than any other state. When a tax is earmarked, the revenue generated from a tax can only be spent for a designated purpose. This complicates the Legislature’s job when attempting to balance its budget, limiting flexibility and interfering with the Legislature’s ability to determine whether those designated dollars are needed and being well-spent. Supporters of earmarking say the practice reflects the will of the people, assuring taxpayers that money is being spent according to the people’s priorities. Others are skeptical that eliminating earmarks is worth the effort because ultimately the problem isn’t earmarking; it’s a shortage of revenue.

2. Tax Credits/Deductions/Exemptions: This study group is tasked with studying the flip side of taxes: the multitude of tax credits, deductions, and exemptions that cut into total tax collections. This often ignored side of the tax ledger is coming in for closer examination with new reporting requirements which will require an accounting of how much these credits, deductions, and exemptions are costing and what the state is getting in return.

3. The Budgeting Process: Initially, this study group was tasked with studying biennial budgeting. Alabama adopts budgets each year, which is the practice in 30 states. The other 20 states adopt budgets that run for two years, a practice called biennial budgeting. Proponents say biennial budgeting creates a better climate for planning and would allow the Legislature to perform a more meaningful review of agency operations in the years when it was not struggling to pass a budget. Critics point to the difficulties that states face in predicting revenue from year to year. They also point to the fact that in biennial states, budgets are often revisited in the off-years, negating the expected gains in time and effort the biennial budgeting theoretically creates. At the Task Force’s November meeting, the chairman of this study group, Rep. Kyle South (R-Fayette), said his study group will not only study biennial budgeting but will also examine Alabama’s process for crafting budgets in a more general sense.

4. Agency review: This study group is seeking information from agencies to further clarify the financial position of state agencies. Because some agencies receive earmarked taxes and federal funding, legislators aren’t always clear on how budget cuts will affect an agency. At the November meeting, Phil Williams, (R-Gadsden), the study group’s chairman, presented preliminary information his office had gathered from state agencies. The agencies were asked to provide the total amount of federal funding received and the amount each agency had in reserve at the end of the budget year.

5. Tax Relief: This study group is tackling the question of whether Alabama’s current tax structure is fair, equitable, and well-designed to encourage the economic prosperity of citizens and businesses.

As the study groups generate information, PARCA will be exploring these issues as well.

At the Task Force’s October meeting, the panel heard presentations from the current chairmen of the House and Senate Budget committees about the problems they face in crafting budgets. While all welcomed the Task Force’s attention to budget matters, a good deal of skepticism was expressed about some of the approaches under review. Earmarking creates problems, the budget panel chairs acknowledged, but they expressed doubt that reform of earmarking would provide a significant change to the bottom line or would be politically feasible. While there was interest in the concept of biennial budgeting, some questioned whether, in practice, a shift to such a system would yield better results. All expressed interest in having better information on which to base budgeting decisions. They encouraged sustained attention by the Legislature and leadership from the governor’s office toward improving the budget process.

There is a lot of money at stake. In round numbers, Alabama government dispenses about $30 billion a year: about $12 billion from state sources and $18 billion from federal and other funds.

Figure 1 Source: Legislative Fiscal Office

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Lackluster 2016 Receipts to General Fund and ETF

Both the accounts that pay for state government operations, the General Fund and the Education Trust Fund (ETF), ended the 2016 Fiscal Year basically flat when compared to the previous year, a sign that the state’s struggles to balance budgets will continue in the future.

What would have been a moderately healthy year of receipts to the Education Trust Fund was dragged down by a drop in corporate income tax collections and the shifting of some revenue into the General Fund to cover anticipated shortfalls in that account. The perpetually struggling General Fund was buoyed by that revenue shift from the ETF and by the increase of tax rates on cigarettes, but was weighed down by a drop of non-recurring revenue sources and lagging collections of taxes on oil and gas production.

For the Fiscal Year that ended Sept. 30, 2016, total receipts to the ETF were $6 billion, up only slightly from 2015. Final receipts to the General Fund, $1.8 billion, were down compared to 2015.

Those basically unchanged, bottom-line numbers from the previous year mask a titanic, behind-the-scenes struggle to balance state revenues with state spending, a struggle that is certain to continue.

Approaching Fiscal Year 2016, the scene for budget problems was set. In 2015 and for two years prior, the state propped up the General Fund, which pays for most of the state’s non-educational operations, with borrowing from the Oil and Gas Trust Fund. The Oil and Gas Trust Fund is in effect the state’s savings account.

The state borrowed approximately $146 million a year for three years. This was authorized by a constitutional amendment passed in 2012. The three years of borrowing was to give the Governor and the State Legislature time to come up with a sustainable solution for a long-running problem, a General Fund that doesn’t bring in enough revenue to support the state’s non-education agencies. The General Fund is fed by a collection of tax sources that don’t grow with the economy. As the expenses of state government grow, especially on big-ticket items like Corrections and Medicaid, the General Fund can’t keep up. The main taxes that grow with the economy – the sales tax and the income tax – are deposited in the Education Trust Fund.

After contentious debate and multiple special sessions in 2015, the Legislature increased the state cigarette tax by 25 cents a pack, which in the end yielded an additional $65 million for the General Fund. The Legislature also changed the allocation of the Use tax. The Use tax is similar to the sales tax and has historically been divided between the General Fund and the Education Trust Fund. The change in the Use tax allocation yielded an additional $100 million for the General Fund, but decreased the amount that the Education Trust Fund received in 2016. While that $165 million in new money for the General Fund would seem to make up for the anticipated hole in the General Fund, there were additional factors that hampered the performance of both the General Fund and the Education Trust Fund in 2016.

The General Fund

As mentioned above, the shift of Use tax revenue and the increase in the cigarette tax boosted the General Fund collections. Also helping the General Fund bottom line were payouts resulting from litigation over the BP oil spill lawsuit. Those settlements brought in an additional $70 million in 2016.

Also, there was some healthy growth in a few of the General Fund taxes that do grow with the economy. For example, proceeds from the tax on insurance premiums rose $10 million, an increase of 3.63 percent over 2015. Sales taxes on automobiles were up by almost $9 million, up 9.8 percent over 2015.

However, there were additional factors that weighed on the General Fund. In addition to the hole caused by the end of the borrowing from the Oil and Gas Trust Fund, the 2015 General Fund was padded by another one-time source of money. For years, the state has been in litigation over its former franchise tax, a tax that was declared unconstitutional. The state had set aside money in escrow to pay claims arising from that litigation. With those lawsuits finally winding down and in the face of 2015 budget difficulties, the state decided it was safe to release most of that money from the escrow account. That one-time revenue available in 2015 was not present in 2016. As a result, the 2016 General Fund received $115 million less from that source.

The General Fund’s problems for 2016 didn’t end there. General Fund tax receipts from oil and gas production saw a $25 million drop. That drop stems from low energy prices and declining production from the state’s oil and gas reserves. In the end, the General Fund collected $13 million less in 2016 than it did in 2015, a decline of -0.70 percent.

Entering 2017, the General Fund will have some cushion thanks to the Legislature’s decision this year to convert the long-term payout of the BP oil spill settlement to up-front cash. The move will result in $85 million in 2017 and $105 million in 2018 to support the Medicaid spending in the General Fund. But once this non-recurring infusion ends, the Legislature will face the difficulty of filling that hole.

Moves in recent years to shift additional growth taxes, like the Use tax, into the General Fund should increase the General Fund’s capacity to grow. The bump generated by the cigarette tax increase helped in 2016, but in the long-term, cigarette tax collections have been trending down as tobacco use decreases. It remains doubtful that General Fund revenue growth has the ability to keep up with the rising costs of the agencies it supports.

The Education Trust Fund

Meanwhile, on the Education Trust side of the ledger, what would have been a healthy growth year turned out to be anemic.

Individual income taxes were up $144 million, a respectable 3.68 percent. Sales tax collections climbed 4 percent, $87 million more than last year. Another bonus for the ETF was the end of the multi-year effort to pay off the ETF’s debt to its Rainy Day Fund. Having completed that repayment, The ETF got to keep an additional $57.5 million that in prior years was applied to that repayment.

But dig deeper and the ETF took some significant hits. The shift of the Use tax receipts to the General Fund decreased the amount of that tax flowing to the ETF. Though overall Use tax collections were up, the net amount sent to the Education Trust Fund fell by $66 million

The biggest hit to the ETF was a decline of $150 million in corporate income tax collections. That drop effectively wiped out the increase in individual income tax collections. Some of that drop was anticipated. The 2015 corporate income tax total was padded with about $90 million in one-time receipts, resulting from audit findings from past years. However, forecasters were surprised by the additional $60 million drop in corporate income taxes and are unsure what caused it. Since much of the decline happened in the latter part of the fiscal year, it may be due to a general decline in corporate profits during that time period. Revenue officials in other states saw similar declines.

Also down were utility tax collections, dropping $25 million, a fact that may be attributable to the warmer winter of 2015-2016.

When other incremental adjustments and smaller taxes are considered, the ETF in 2016 took in just 0.4 percent more than is in 2015.

Going into 2017, the Education Trust Fund should be poised for healthier growth. It will need it. The 2017 Budget, approved earlier this year, includes a 4 percent raise for teachers. In the meantime, the weakness in corporate income tax receipts bears watching.

No doubt, the Legislature will face fiscal challenges in the upcoming session.  PARCA will continue to follow these important issues.


Constitutional Amendments on the November Ballot

When Alabama voters go to the polls on November 8, they will be asked to consider adding 35 more amendments to the Alabama Constitution. PARCA has compiled a summary of each of the 14 amendments that will appear on the ballot statewide.

Alabama already has the nation’s longest constitution — about 12 times longer than the national average. Since its adoption in 1901, the Alabama Constitution has been amended 895 times.

In principle, constitutions are meant to lay out the fundamental powers of government and establish a statewide framework for its operation, leaving the state legislature and local legislative bodies the task of carrying out work within those limits. Alabama’s Constitution, by contrast, is minutely detailed with a multitude of amendments that create local exceptions that apply to individual jurisdictions, as well as provisions that apply statewide.

The problem stems from the constitution strictly limiting the powers of local governments. Almost immediately after its adoption, the constitution began to accumulate amendments, most of which created local exceptions to state constitutional principles. November’s ballot continues that practice. Of the 35 amendments proposed, 25 apply to a single jurisdiction. Of the total, 14 amendments will be voted on statewide. Of those, 10 will affect the state as a whole, and four pertain to an individual locality but are being voted on by voters throughout the state.

Of those local amendments being considered statewide, one is a proposal to raise the maximum age of the probate judge in Pickens County to 75. Voters statewide will also decide whether the citizens of Etowah County can create a personnel board for employees of its sheriff’s department.

Four statewide amendments, Amendments 3, 4, 5 and 6, make a modest effort to clean up some of the problems with the Constitution. These amendments are the result of the work of a nonpartisan commission chaired by former Governor Albert Brewer, PARCA’s founder and chairman emeritus.

In addition to PARCA’s summary, more information on the proposed amendments can be found on the Secretary of State’s website including summaries and explanations compiled by the state’s Fair Ballot Commission.

Read PARCA’s analysis of the proposed amendments.


New College-Going Rates by High School

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What percentage of the graduates from your local high school go on to college?

Where do they go? To four-year universities or two-year colleges? In-state or out-of-state? Private or public?

Answers to those questions can be found in new data provided by the Alabama Commission on Higher Education. The data, drawn by ACHE from the National Student Clearinghouse, provides college-going data both for the state as a whole and for all Alabama public high schools. It’s just the second year this comprehensive set of data has been available. Previously, ACHE’s college-going statistics could only report on high school graduates entering public colleges and universities in Alabama. The more comprehensive data captures enrolling in public and private colleges throughout the country.

Alabama’s high school graduation rate reached 89 percent in 2015, and thanks in part to that, the state’s public high schools produced more graduates who entered higher education at both two-year colleges and four-year schools. The number of students who graduated but did not enroll in college the year after graduation also increased.

Of the students in the graduating class of 2015, 64 percent enrolled in higher education: 32 percent at a two-year college, 32 percent at a 4-year institution. Meanwhile, 36 percent did not enroll in that first year after graduation.

Of those that graduates who went on to college, 91 percent went to college in the state of Alabama and 9 percent enrolled in out-of-state institutions; 7 percent of graduates enrolled in private colleges and 93 percent went to public colleges and university. Using the selection boxes below you can look at the statistics for any high school in the state.


When making comparisons of college-going rates, it’s important to keep the socio-economic composition of the various schools and systems in mind. Students from families with higher incomes and whose parents went to college are more likely to go on to higher education. Those students tend to have great exposure and access to higher education and also have greater ability to afford college. The National Student Clearinghouse annually publishes a report on college-going rates and persistence through college. The report includes comparisons of the results from schools with varying demographic compositions. The Student Clearinghouse study looks at enrollment in the fall after graduation, while the ACHE data looks at enrollment at any time in the first year after graduation from high school. Regardless, the Student Clearinghouse data shows clear differences in the college-going rates between high-poverty and low-poverty school systems. The chart below represents college enrollment rates in the first fall after high school graduation for the U.S. national class of 2014, from public non-charter Schools, by poverty level. Further discussion can be found in the Clearinghouse report: High School Benchmarks 2015: National College Progression Rates.

With those distinctions in mind, the comparative data from Alabama shows striking differences in college-going rates and the destination of students after graduation.

Systems with low poverty rates, like Mountain Brook and Vestavia Hills, send most of their graduates on to four-year colleges and universities. Other systems with somewhat higher poverty percentages still send a large percentage of graduates off to college. However, more of those graduates start at a community college.

When comparing individual high schools, it is also important to keep in mind that some high schools, like Loveless Academic Magnet Program (LAMP) in Montgomery or Ramsay High School in the Birmingham City System, are academic magnets. Those magnet schools also tend to send a higher percentage of students on to higher education. In fact, the top four Alabama high schools in terms of college-going rate are magnets: three Montgomery magnets — LAMP at 98 percent, Booker T. Washington at 94 percent, and Brewbaker Technology Magnet at 93 percent — plus Birmingham’s Ramsay at 93 percent.

With two years of data from ACHE, it is now possible to note year-over-year changes in the percentage of students going on to higher education from various schools. When looking at those year-to-year changes, it is important to keep in mind that smaller high schools will see bigger fluctuations because a few more students going on to college can make a bigger change in the percentage of graduates going on to college. Comparing the graduating classes of 2014 and 2015, the biggest change in college-going rates occurred at Sunshine High School in Hale County. Because Hale County has now closed Sunshine, its 2015 graduating class will be its last. But that class showed a remarkable jump in college-going. In 2014, Sunshine produced 14 graduates, and half of them went on to higher education. In 2015, the school produced 23 graduates and 85 percent of those graduates enrolled in higher education the year after graduation. According to Hale County Superintendent Osie Pickens, the Hale County High School counseling staff made an extra effort to place that last class of graduating students from Sunshine resulting in the jump in college-going rate.

The tool below presents five different views of the data. The first tab contains a graph that presents each high school’s college-going rate along with the percentage of its students from households in poverty. The second tab is a chart that presents college-going at the system level, including the percentages of graduates going to four-year colleges, two-year schools, and the percentage that didn’t enroll. The third tab presents the same information at the school level. The fourth tab presents system-level statistics for the numbers of graduates, the percentage of graduates going on to higher education, and the percentage point change in college-going for that system between 2014 and 2015. The fifth tab presents the same statistics at the school level.



First Meeting of Task Force on Budget Reform Wednesday

A newly formed Joint Legislative Task Force on Budget Reform meets for the first time this week in Montgomery: a group of House and Senate members tasked with studying and recommending changes to the state’s broken system for budgeting. That is the same issue PARCA examined at its 2016 Annual Meeting this February.

The Task Force meeting is scheduled for 2 p.m. Wednesday, at the State House, Room 200.

The Legislature is just coming off yet another special session, called this year by Governor Robert Bentley to stave off severe Medicaid service cuts that would have resulted from General Fund budget passed in the 2016 Regular Session.

In 2015, Bentley called the Legislature back twice to cope with the same problem: a persistent structural deficit in the General Fund. Since 2000, there have been 16 special sessions called by governors. While not all of those have been called to address budget issues, many have, including the past three special sessions.

The Joint Resolution creating the new Task Force acknowledges that the Legislature’s most recent temporary solution to its budget woes – using money from the BP Oil Spill Settlement to supplement state support for Medicaid for the next two years — doesn’t solve the essential problem. As the resolution put it: “The expenditures of state government within the General Fund are projected to continue growing at a level that will outpace available revenues.”

Why do we have this recurring problem?

1. Alabama is short on money. Alabama state and local governments collect less in taxes, per capita, than governments in any other state in the United States (PARCA Perspective, Dec. 2015).

2. Alabama’s General Fund is supported by taxes that don’t grow. Agency expenses rise, but the funds available to pay for them don’t keep up. (PARCA Perspective, Oct. 2015). In light of that, the Legislature applies one-time revenue sources to plug budget holes. And that guarantees the shortfall will recur when those one-time revenues are exhausted.

3. Alabama needs, but does not have, an effective budgeting process, one that identifies priorities and goals, pushes for efficiency, and maximizes effectiveness.

In the interest of improving budgeting in Alabama, the Task Force has been asked to examine the following questions:

1. Should we implement biennial budgeting — drafting budgets that cover two years, rather than one?

2. Should we require state entities to undergo greater performance and program reviews?

3. Should we unearmark funds in order to provide for greater legislative oversight and appropriating flexibility?

4. Should we review existing state tax credits and deductions and creating a policy to ensure that future tax credits effectively provide economic gain to the state?

5. Can we identify areas to provide tax relief to Alabama families without significantly impacting state budgets?

At PARCA’s 2016 Annual Meeting, we presented a summary of the current budget process, its problems, and potential solutions. To put Alabama’s budgeting process in a national context, the PARCA program featured William Glasgall the director of State and Local Programs for the Volcker Alliance. The nonpartisan Volker Alliance is working nationally to encourage greater truth and integrity in state government financial reporting and budgeting. Glasgall’s presentation identified national budgeting best practices, and compared Alabama’s, noting areas where the state compares favorably and where it needs work.

Based on research presented at the Annual Meeting, PARCA developed a series of basic recommendations for improving the budget process:

Recommendation #1:  Good fiscal decisions require clear, concise information. State government should present continuous, clear, and meaningful information on state revenues and expenditures.

These reports should be regular and timely and include a narrative explanation the numbers. Reports should:

1. Clearly identify one-time sources of revenue

2. Evaluate the cost of tax incentives and the benefits produced

3. Disclose debt costs and trends, including long-term forecasting of revenue and expenditure growth

Recommendation #2: The executive and legislative branches should reexamine and reconcile their budgeting process based on the requirements of the Alabama’s existing Budget and Management Act, making adjustments where improvement is needed.

1. The Governor’s budget should include strategic planning and explanation of budget choices, goals, and plans.

2. Agencies should make reasonable requests that include performance measures.

3. The Governor and Legislature should work toward agreement on:

– consolidating the information gathering process

– identifying relevant and meaningful expense data and performance measures to be tracked

– a budget process that encourages both cost reduction, innovation, and success in meeting state policy priorities

Recommendation #3:  Ultimately, revenues must match expenses. The State should recognize and address the chronic structural deficit in the General Fund.

Alabama’s habit of earmarking revenue limits transparency, flexibility, and better budget management. Reducing earmarking should be pursued. However, considering Alabama’s low per capita tax revenues, and low comparative spending on big-ticket items like education, prisons, and Medicaid, un-earmarking is unlikely to solve recurring financial problems. Along with improvements to the budget process, a stable, revenue source that will grow over time, along with expenses, should be added to the General Fund.

PARCA will provide updates on the work of the Budget Task Force throughout the fall.


2015 WorkKeys Assessments for Alabama Schools and Systems

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In 2015, for the first time, all high school seniors took a new assessment test, WorkKeys, designed to determine whether students are learning the skills they need to enter the workforce.

The results from that first WorkKeys assessment are in and are now available for local systems and schools.

Statewide, 60 percent of high school graduates tested were deemed workforce ready, according to the results. By the State Department of Education’s definition, a student who earned a Silver certificate or higher is workforce ready.

The WorkKeys test was developed by ACT, the same company that offers the ACT, the widely-known test of college readiness. The content of the test was developed using a similar approach to the ACT. ACT surveyed employers to develop a catalog of the foundational skills needed to succeed in the workplace, across industries and occupations. ACT then developed a test to measure whether prospective employees or, in this case, high school students, had those necessary skills to perform in the nearly 20,000 occupations ACT evaluated.

WorkKeys has three core skill assessments: Applied Mathematics, Locating Information, and Reading for Information. The assessments are then graded, and test-takers are assigned a skill level.

Those scoring at the Platinum Level have demonstrated the skills needed for 99 percent of the occupations in the ACT jobs dataset. Those earning a Gold level certificate should be ready for 93 percent of jobs in the database. Scoring at the Silver level indicates a candidate has the skills necessary to succeed in 67 percent of jobs in the ACT database. Those earning a bronze certificate are judged to be ready for 16 percent of jobs.

Additional information for understanding WorkKey’s scores can be found on ACT’s website.

Statewide, 1 percent of Alabama’s 2015 high school graduates earned a Platinum certificate; 16 percent earned Gold; 44 percent earned Silver. Those graduates were, by the State Board of Education, to be career ready. Graduates who earned a bronze level certificate, 27 percent of graduates, and those who failed to earn a certificate, 13 percent of graduates, did not earn the college and career ready stamp.

When the state’s strategic plan for education, Plan 2020, was adopted by the State Board of Education, the board set a goal of achieving a 90 percent graduation rate.

At the same time, it set a goal of having all those graduates ready for college and career. Earning a Silver WorkKeys certificate is one way a student can be judged as college and career ready. They can also demonstrate college and career readiness by:

  1. Scoring at or above the college readiness benchmark on one of the tested subjects on the ACT
  2. Earning a passing score (3 or above) on an Advanced Placement or International Baccalaureate exam
  3. Receiving an industry-recognized credential recognized in the appropriate business sector
  4. Earning college credit through dual enrollment at a two-year college or university
  5. Successfully enlisting in the U.S. military.

In 2015, 89 percent of Alabama high school students graduated on time, four years after entering the 9th grade. A preliminary State Department of Education analysis found that 68 percent of those graduates met one or more of those college and career ready measures.

ACT WorkKeys assessments have been used for more than two decades by job seekers, employees, employers, students, educators, administrators, and workforce and economic developers. The assessments are designed to measure both cognitive (“hard”) and noncognitive (“soft”) skills tests.

Using the results, students should be able to determine their skill levels, identify skills needing improvement, and match the measured skill levels to specific job requirements.

The results can be provided to employers to demonstrate that a job applicant has the skills needed for workplace success.

You can explore the results for Alabama’s public schools and systems in the interactive charts below.


2015 ACT Results by System and High School

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We now have the 2015 results for the ACT, the widely-known test of college readiness. With interactive charts posted below, you can explore how well your local public school system or high school is doing preparing students for college.

This is the first set of results in which all Alabama high school students took the ACT.  In the past, only students who were college bound took the ACT. Now, all high school students take the test in their junior year, and the results reflect the percentage of students who graduated from high school ready to succeed in college-level courses as measured by the ACT.

Because the universe of students taking the test has widened to include all students, this year’s results for the state and for schools should not be compared to previous years or to national averages.

The ACT is one of several measures the state and local schools use to determine whether their graduates are ready for college and career.

In addition to succeeding on the ACT, a student can be classified college or career ready if he or she:

  1.  Scored at either the silver, gold or platinum level on WorkKeys, a test that measures workplace skills
  2.  Earned a passing score (3 or above) on an Advanced Placement or International Baccalaureate exam
  3.  Received an industry-recognized credential recognized in the appropriate business sector
  4.  Earned college credit through dual-enrollment at a two-year college or university.
  5.  Successfully enlisted in the U.S. military.

Statewide, the Alabama’s high school graduation rate climbed to 89 percent in 2015. The state Department of Education reported in January that 68 percent of graduates had met one of those definitions of career/college readiness.

On the ACT, the state counts a graduate as college ready if he or she scores at or above the college-ready benchmark in one of four subjects on the ACT: English, reading, math, or science. According to ACT, if a student meets or beats the college-ready benchmark in a subject that student has a 50 percent chance of making a B or better in a college-level course in that subject and a 75 percent chance of making a C or better.

Statewide, 52 percent of students scored college ready in English; 33 percent in reading; 22 percent in math; 24 percent in science. Only 15 percent of students statewide scored met or exceeded all four college-ready benchmarks.

This year’s ACT results follow a similar pattern to results on the Aspire, the standardized tests given to children in grades 3-8. In systems with lower rates of poverty, a higher percentage of students meet or exceed the college-ready benchmark. In systems with higher poverty percentage, a lower percentage of students score at or above the benchmark.

In systems with lower rates of poverty, a higher percentage of students meet or exceed the college-ready benchmark. In systems with higher poverty percentage, a lower percentage of students score at or above the benchmark. While it is important to keep poverty rates in mind when judging schools and systems, a school’s demographics don’t dictate results. Judging by the results, some schools are more effective at preparing students for college.

That is especially noticeable at the school level. The school with the highest rate of graduates testing college ready on all subjects is Montgomery County’s Loveless Academic Magnet Program (LAMP) High School. In general, magnet schools like LAMP, which draw the most academically advanced students and which offer the widest selection of college-level courses, tend to produce higher percentages of college-ready students.

Note: Results have been updated to include access to results for the 2015-2016 graduating class.


2015 Aspire Results for Systems and Schools

Want to explore how your local public school system or school performed on the statewide benchmark test, the ACT Aspire?

Using Aspire results, PARCA works with local school systems to analyze performance, building comparisons with similar systems and with the state as a whole. In grades 3-8, students are tested in reading, math, and science. In 10th grade, the tested subjects are English, math, and science. Our key metric is the percentage of students tested who score proficient on a particular test. By scoring at or above proficient, a student is considered to be “on track” for his or her grade level. Students who stay on track should be able to succeed on the college readiness test, the ACT. A student meeting or exceeding the benchmark on the ACT is judged to be ready for success in college.

While systems are often judged on the test results generated by “all students” taking the test, it is important to look deeper at comparisons of how the various subgroups of students perform. Students from low-income backgrounds, as a group, don’t perform as well on these types of tests as students from more higher-income backgrounds. Thus, a school system’s performance should be judged in context. Are nonpoverty students in a school performing as well as nonpoverty students elsewhere? How do the results for poverty students compare to results generated by other systems?

New for 2015 is the ability to compare a school or system’s performance with its results from 2014. Did a school or system improve performance from one year to the next?

The interactive charts below allow you to build your own comparisons between peer schools and systems. Are students in your school succeeding at the same rate as those in the comparison schools? Tabs at the top of the chart allow you to look at the data in various ways.

If you dive deep in the data, you may notice that there are some schools and systems that don’t display results on some measures. There are a couple of reasons for this. In some circumstances, the tested population for that measure is very small. In that case, the State Department of Education doesn’t release results in order to protect student privacy. A second reason data might not be available has to do with the way schools and systems identify poverty students. Traditionally, students who were eligible to receive free or reduced-price lunches under the National School Lunch program were identified as students in poverty. In recent years, schools and systems with higher concentrations of poverty have had the option of providing free lunches to all students. In those schools and systems, all students are identified as poverty students. This leaves us unable to compare the performance of poverty and nonpoverty students in those schools.


PARCA Annual Meeting Additional Materials

PARCA’s Annual Meeting was held in Birmingham on Friday, February 5. Its focus was Alabama’s process for formulating budgets.

PARCA’s description of current budget issues can be accessed here.

The presentation made by William Glasgall of the Volcker Alliance describing budget issues in a national context can be found here.

If you want to look at Governor Robert Bentley’s Budget proposal for FY 2017, it can viewed or downloaded here.

For comparison, the links below provide a look at the budget documents from other states.

South Carolina

Virginia

Tennessee

Georgia’s Budget in Brief and links to other budget documents

Mississippi

 


Resources for Understanding Alabama's Budget Process

One resource for understanding budgets is the Budget Fact Book published by the Alabama’s Legislative Fiscal Office.

As February approaches, the Legislature is preparing to return to Montgomery for yet another tough session of struggling with Alabama’s budgets.

The Governor’s Office is in the process of crafting a proposed plan and budget. The Legislature has already begun its process of reviewing budget requests from state agencies.

PARCA’s annual meeting, to be held Friday, February 5 at the Harbert Center in Birmingham, will focus on Alabama’s budget process: how it works now and how it might be improved. The meeting agenda features William Glasgall of the Volcker Alliance, a national nonpartisan effort to rebuild trust in government and improve its effectiveness. Glasgall serves as the Program Director for the Alliance’s State and Local Accountability and Improvement programs, which has focused its research on ways to improve state budgeting and financial practices. Leaders from the Legislature’s budget committee will participate in a panel discussion of the budget process and the challenges the state will face. Gov. Robert Bentley will deliver the luncheon address.

In preparation, PARCA has compiled a sampling of resources available to those who want to better understand the budget process.

You can find an overview about how the various states pursue budgeting in Budget Processes of the States from the National Association of State Budget Officers. The publication explains terms like programs, performance, and zero-based budgeting, and compares states on the approaches they take. The Volcker Alliance’s website features several publications recommending improvements in the way states budget.

Closer to home, the basic law describing how Alabama’s budget process is supposed to work is the Budget Management Act.

For those of you who want to follow the blow-by-blow of the budgeting process during the coming session, here are some key links:

The Executive Budget Office

When the Governor publishes his budget in the coming weeks, it will be posted here as the executive budget, along with budgets from previous years. The Finance Department website also includes budget summary spreadsheets that offer comparisons of the governor’s proposed but with those of prior years.

After they are introduced, The Legislative Fiscal Office also publishes spreadsheets of the budgets under consideration.

Annually, the Fiscal Office also publishes and posts A Legislator’s Guide to Alabama Taxes, with detailed information about tax collections and descriptions of Alabama and also the annual Budget Fact Book, with information about each agency’s budget and performance measures.

For the super budget geeks:

You can find reports on state revenue and spending at Open.Alabama.gov.

In a different spot on the Web, the Department of Finance publishes Quarterly Budget Management Reports that detail year-to-date revenues and expenditures for each agency and Quarterly Performance Reports that are supposed to provide insight into how agencies are doing carrying out their various missions.

But a word of warning, the Budget Management Reports are detailed and dense. The pdf file that includes all spending and revenue by state agencies is 2,627 pages long.  The Quarterly Performance Reports for all state agencies are over 200 pages long, and the depth of information varies widely agency-by-agency.