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.

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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.

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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.

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’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

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 budget 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.

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In January 2016, The Public Affairs Research Council of Alabama conducted its annual poll of public opinion. This is the 10th year of the survey. This year, the survey focuses on revenue and spending in state government. The survey touches on multiple topics: taxes, education, Medicaid, highways, public safety, courts, state parks, and others. The complete survey results are posted in presentation form above. Text of the questions and results are presented at the bottom of this post. Highlights are featured below. An in-depth audio-visual presentation of the of the results is also available here.

The survey of 466 Alabamians was conducted between January 4 and January 21. Randolph Horn, Samford University Professor of Political Science and Samford’s Director of Strategic and Applied Analysis, collaborated with PARCA on the design of the survey and directed the polling operation. The results were weighted to reflect the demographic makeup of the state.

Respondents ranked education as the most important investment the state makes followed by health care, public safety, and highways. All four areas are underfunded in Alabama, according to a majority of respondents.

In the areas of education and health care, majorities said they would be willing to pay more in taxes the avoid cuts or achieve adequate funding. In the areas of public safety and highways, less than a majority would be willing to pay more in taxes to avoid cuts or achieve adequacy.

A majority said the state needs more revenue to support state services.

Respondents perceive that state and local taxes fall more heavily on lower-income Alabamians than higher income range. A plurality of respondents say that lower-income residents pay too much in state and local taxes and a majority say that that those in the upper-income group pay too little.

Given options for how the state might increase tax revenue, the only option receiving majority support was to make the state income tax more progressive by increasing the percentage of income that high-income individuals pay in state income taxes.

Looking more closely at more targeted areas of state investment, a majority of respondents said state parks and state troopers are not adequately funded. Opinions were more mixed when it came to state courts and driver’s license offices.

But none of those areas received majority support when respondents were asked if they were willing to pay more in taxes to support them.

A majority of respondents support expanding Medicaid to cover more people. The same question was asked last year and received the same level of support.

On most questions, Alabamians, whether Democrat or Republican, black or white, are relatively united in opinion. However, the response to the Medicaid question does show a partisan divide with majorities of Democrats and independents supporting expansion while a majority of Republicans support maintaining the system as it is.

Strong majorities felt that officials in Montgomery did not care about their individual opinions. This is consistent finding over time.

That distrust of elected officials is perhaps reflected in respondents’ support for earmarking state revenue. Earmarking is defined as designating revenue raised from a particular source to be spent for a particular purpose. An example would be Alabama’s earmarking of income and sales tax revenue for public education.

When it comes to education spending in Alabama, respondents had particularly strong opinions: 69 percent said the education budget should be kept separate from the budgets funding other state services; 70 percent said too little is being spent on education; over 80 percent said the level of funding for schools makes a difference in educational quality; 86 percent said that the state should make up the difference if a community is too poor to support schools adequately.
In terms of what areas are most need of investment in education, respondents showed the strongest support for spending more on teacher’s salaries, with 71 percent supporting increasing teacher salaries. Increasing spending on technology infrastructure, hiring more classroom teachers, school security, classroom technology, and music and the arts all received majority support.

The full text of questions and results is included below.

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The Alabama Commission on Higher Education has produced a new set of data that gives a more complete picture of the college-going rate statewide and for individual high schools. According to the data, of the 45,760 students who graduated in the spring of 2014:

–     33 percent enrolled in two-year colleges

–     32 percent enrolled in four-year colleges and universities

–     35 percent of graduates did not enroll in higher education in the year after their graduation

Historically, ACHE, the state’s coordinating agency for higher education, has surveyed Alabama public colleges, both two-year and four-year, in order to determine the number of Alabama public high school graduates who enrolled in college the year following their high school graduation. In determining college-going rates, that data had limitations because it only tracked those students who enrolled in Alabama public colleges. Students who went to private schools or went out of state were not counted.

Now, drawing from data compiled by the National Student Clearinghouse, ACHE can follow the enrollment of all public high school graduates whether they go to public or private schools after graduation, both in-state and out of state. The new data that gives a more complete picture of college-going rates.

That data is presented in the interactive charts below.

Plan 2020, Alabama’s strategic plan for public education, sets a goal of having 90 percent of students graduate on time and that those students who do graduate are ready for college and/or career. To some extent, this college-going rate is a reflection of how well schools are doing at producing graduates who are ready to go into higher education. However, it is very important to realize that college-going is highly correlated with a student’s socio-economic status. High schools that have a more affluent student population will see a much higher percentage of their students proceed directly into college. Schools that work with more low-income students will have a lower college-going rate.

Regardless of their demographic makeup, all schools and systems should be looking for ways to promote college access for their graduates. A study published this month by the Pew Research Center found that the middle class is shrinking as a percentage of the population. According to Pew’s analysis of government data, education levels are a key factor in an individual’s economic prosperity. Individuals with a bachelor’s degree or higher are experiencing economic gains, with and increasing share of them moving into upper-income brackets. On the other hand, those without a college degree are slipping farther behind.

Along with the broad effort by public schools to improve students’ preparation for college, there are also targeted efforts underway to increase college-going rates by better connecting students with the resources they need to pay for college. To access financial aid available to help pay for college, students must fill out a Free Application for Federal Student Aid (FAFSA). The FAFSA form is notoriously difficult to complete, but successful completion of the form greatly increases the chances a student will enter college. According to the U.S. Department of Education, 90 percent of students who complete a FAFSA form attend college the following fall. Cash For College is a statewide FAFSA completion campaign coordinated by Alabama Possible, a non-profit working to combat poverty. Alabama Possible is working with the Alabama State Department of Education, local schools, and higher education institutions to boost FAFSA completion. The organization provides tools, data, and strategic approaches that schools can use to boost FAFSA completion rates, with an end goal of helping more students enter and pay for college.

Cash For College is a statewide FAFSA completion campaign coordinated by Alabama Possible, a non-profit working to combat poverty. Alabama Possible is working with the Alabama State Department of Education, local schools, and higher education institutions to boost FAFSA completion. The organization provides tools, data, and strategic approaches that schools can use to boost FAFSA completion rates, with an end goal of helping more students enter and pay for college. Information on how to participate is available on the Alabama Possible website.

The charts below allow you to examine the rate of college-going by county, by system, and by individual school. The charts allow you to look at the percentage of students who enroll in four-year schools, two-year schools, and the percentage of graduates who haven’t enrolled. This set of data looks at the high school students who graduated in the spring of 2014. The National Student Clearinghouse database was then checked in July of 2015 to determine whether those high school graduates had enrolled in higher education the year following their graduation.

Alabama once again ranks last in per capita state and local tax collections, according to new data released by the U.S. Census Bureau. Alabama has consistently maintained its No. 50 ranking since the early 1990s.

As a result, Alabama state and local governments have less to spend than governments in other states when providing services to the public. This lack of revenue is an underlying factor in the state’s recurring budget problems. The Governor and Legislature struggle to find enough money to adequately support the functions of state government. In the past several years, the government has made cuts to programs, borrowed from the state savings account, and applied one-time sources of money to balance the budget.

In 2015, the Legislature couldn’t agree on a General Fund budget until September, putting in place a budget just before October, the beginning of the 2016 fiscal year. Again, agencies’ budgets were cut, funds were shuffled between accounts, and modest tax increases were passed to balance a bare bones budget. The most recent comparative data available from the Census is from 2013, so the effects of the tax changes made in 2015 won’t show up for several years. However, the minor changes are unlikely to affect Alabama’s No. 50 ranking.

Low taxes per capita don’t necessarily mean low tax burdens for everyone. A mix of different taxes make up total tax collections, and each state structures its taxes differently. There are three principal types of state and local taxes: property, income, and sales. A tax system that is balanced among these three sources promotes fairness and stability. Alabama’s tax system is not balanced. Alabama has the lowest property tax collections in the country. To make up the difference, Alabama relies more heavily on sales taxes.

The rules governing how taxes are applied also makes a difference in who pays them. In Alabama, property taxes are structured in a way that benefits homeowners, and owners of land in use for agriculture or timber. Commercial and utility property owners pay more than those protected classes.

Meanwhile, Alabama’s average combined state and local sales tax rates are 4th highest in the country, according to the Tax Foundation. Those taxes fall most heavily on low-income Alabamians since they spend a greater share of income on goods that are taxed. Many states attempt to lighten the burden by exempting groceries from the sales tax or giving an income tax rebate to low-income families. According to the Center for Budget and Policy Priorities, only two states, Alabama and Mississippi, allow the full weight of the sales tax to apply to groceries.

Concerning the income tax, most states employ measures to minimize the income tax that low-income households have to pay. Alabama, by contrast, begins taxing income at one of the lowest thresholds in the U.S. Alabama is one of only three states that allows taxpayers to fully deduct federal income tax paid, when calculating their tax bill. That tax break provides a larger benefit for more affluent families, who pay more in federal taxes.

Here’s how Alabama tax revenues per capita rank in the various categories of taxation.

Alabama has low tax collections per capita for two reasons: low tax rates and a relatively small tax base. One way to measure a state’s tax base is to look at gross domestic product, the value of all goods and services produced in a state. Alabama ranks 45th among U.S. states on GDP per capita. In the Southeast, Louisiana, North Carolina, Georgia, Tennessee, Kentucky, and Florida have higher per capita GDP than Alabama. Arkansas, South Carolina, and Mississippi have lower per capita GDP. Alabama applies low tax rates to a smaller taxable base to produce the lowest taxes per capita, not only in the region, but also in the nation at large.

In the interactive presentation below, Alabama’s tax collections are compared to other Southeastern states. In general, these states have similar demographics and similar attitudes toward taxes and the size of government. Using the geography menu, you can change the comparison states.

Receipts to Alabama’s Education Trust Fund grew by 4.2 percent in FY2015, according to year-end revenue reports, allowing the state to finish repaying the education’s borrowing from the state savings account and to begin socking away additional savings for the next downturn.

It should be noted, however, that for the current budget year, state support for local K-12 schools is still lower than it was in 2008.

The total received by the ETF, the account that pays for K-12 and higher education, climbed from $5.8 billion to $6 billion. Proceeds from the state sales tax were up 3.25 percent, and individual income tax totals increased 4 percent. Gross corporate income taxes collections were up substantially, but a big chunk of that was due to a one-time infusion of $90 million that came as the result of an audit. Leaving out that $90 million, gross collections were up 1.75 percent. At the same time, though, refunds to companies paying the corporate income tax were down. As a bottom line, when the one-time payment is factored out and the refunds factored in, receipts from the corporate income tax were up 6.3 percent. The chart below summarizes the receipts to the Education Trust Fund.

The growth allowed the state to repay prior obligations and to begin reserving money to offset future downturns. From the sales tax, $24 million was spent to restore the financing of the state’s pre-paid tuition program (PACT). Another $58 million was used to repay the Alabama Trust Fund for withdrawals from the Rainy Day Fund made during the Great Recession. The Rainy Day Fund is a pool of money within the oil and gas trust fund that can be drawn on to prevent mid-year budget cuts, known as proration.

In addition, the 2011 Rolling Reserve Act places a cap on the amount ETF spending can increase each year. Those limitations on the 2015 budget resulted in the ETF ending the year with a positive balance of $140 million. Of that, $118 million will be held in what’s known as the Budget Stabilization Fund. In the event of an economic downturn, that will provide an additional cushion against proration. The other $22 million of that 2015 balance will be deposited in an Advancement and Technology Fund, which the Legislature can tap to pay for repairs or deferred maintenance of facilities, for classroom instructional support, for insuring facilities, for transportation, or for the acquisition and/or purchase of education technology and equipment.

The 2016 budget makes $4 billion in state funds available to support local schools. By comparison, the 2008 budget allocated $4.3 billion. Allocations for technology, textbooks, professional development, transportation, classroom supplies, and student materials are still well below 2008 levels.