Alabama Grows, but Slowly, Weighed Down by High Death Rate and Low Rate of International Migration

Alabama’s pace of population growth increased in 2017, but the state remains slow-growing compared to most of its Southeastern neighbors, according to the latest estimates from the U.S. Census Bureau.

Two factors holding down growth: Alabama has the nation’s second-highest death rate and one of the lowest rates of immigration from other countries.

Domestic in-migration

For the first time in several years, Alabama had a positive rate of domestic in-migration — more people moving to the state than leavingvfor other states, according to PARCA’s analysis of the recently released data.

For most of the past decade, more U.S. residents have left Alabama than moved into the state. While the new Census estimates show Alabama with a net positive in domestic migration, most other Southeastern states have much higher rates of domestic in-migration. That’s been true since 2010.

A case in point is South Carolina. In 2010, Alabama’s population was greater than South Carolina’s: 4,785,579 vs. 4,635,834. But since 2010 South Carolina has added almost 400,000 new residents with the strongest source of growth being through domestic in-migration. Alabama has added fewer than 100,000 residents over the same period. According to the estimates, South Carolina’s population now exceeds Alabama’s, with 5,024,369 residents to Alabama’s 4,874,747.

After the next Census, due to its relatively sluggish population growth, Alabama is expected to lose a seat in the U.S. House of Representatives. North Carolina is expected to gain a seat and Florida is expected to gain two.

A high death rate

Though Alabama may be beginning to attract residents from other states, our state residents are dying faster and earlier than residents of other states.

Alabama has the country’s second highest death rate in 2017, according to Census estimates (only West Virginia’s is higher). Over 52,000 Alabamians died in 2012, yielding a death rate of 10.8 per 1,000 population. That’s twice the rate of death rate of the leading state, Idaho, which has a death rate of 5.4. And 2017 is not an anomaly: Alabama has been No. 2 every year of this decade, except for 2012 when our death rate ranked No. 3.

Alabama’s high death rate isn’t just noted in Census estimates. The Centers for Disease Control consistently ranks Alabama’s death rate from a variety of leading causes of death in the country’s top 10.

In 2016, Alabama had the fourth highest death rate from heart disease, the nation’s leading cause of death. Alabama also had the country’s highest death rate from stroke, ranked No. 7 from deaths from cancer and Chronic Lower Respiratory Diseases.

In 2016 Alabama had the country’s highest infant mortality rate and the second highest rate of deaths from firearms.

The more than 58,000 births in Alabama, a rate of 12 per 1,000, more than offset the number of deaths, resulting in a net positive natural increase in the population of approximately 6,000. Alabama’s birth rate ranked 30th among the US states, slightly below the U.S. average of 12.16.

International immigration

A final factor in population change is international migration and relatively few migrants from other countries are moving to Alabama. In 2017, Alabama ranked No. 46 among U.S. states in its rate of international in-migration. Five states attracted less than 1 foreign immigrant for every 1,000 residents: Alabama, Mississippi, West Virginia, Montana and Wyoming.

Overall picture

Most states added population in 2017, according to the estimates. Only, Illinois, West Virginia, Wyoming, Louisiana, Alaska, Mississippi, and Hawaii lost population.

Alabama had a net addition of 14,202 residents from July 1, 2016 to July 1, 2017, a 0.3 percent increase in the state’s population. Alabama’s percentage population increase ranked 33rd.

Since 2010, Alabama’s population has increased by 94,612, or 2 percent, ranking 38th among the states in percentage population growth during that period.

College-Going Rates for Alabama High Schools

With population growth and a rising high school graduation rate, Alabama’s high schools are producing more graduates and they are sending more graduates, in absolute numbers, to higher education. However, at the same time, a slightly smaller percentage of graduates are moving directly into higher education. In 2016, 63 percent of high school graduates enrolled in college in the year after their graduation. That compares to a 65 percent enrollment rate in 2014.

That’s according to new data released by the Alabama Commission on High Education (ACHE). The data from the report is drawn from the National Student Clearinghouse, which tracks student entry and progress through higher education. College-going rates and college destination statistics for the state, for systems and for individual Alabama high schools can be found on PARCA’s Data Dashboard.

The findings in the most recent report are similar to patterns identified in another recently released dataset from ACHE, its high school feedback report. PARCA’s analysis of that data shows that though a slightly lower percentage of graduates are enrolling in higher education, those enrolling appear to be better prepared since a smaller percentage of those enrolled students are placed in remedial education after graduation.

Where are we now?

Alabama trails most U.S. states when it comes to educational attainment, with a smaller percentage of Alabama’s population aged 25-64 holding a college degree. Higher levels of educational attainment produce higher incomes and more job stability in an economy which increasingly demands education beyond high school. To close the gap with other states, Alabama needs a greater share of its population obtaining higher education credentials. But, according to the most recent comparative data, Alabama trails the national average and lags behind all other Southeastern states in the percentage of high school graduates going directly into college.

According to the new ACHE data, approximately 63 percent of Alabama high school graduates are enrolling in college the year after graduating from high school:

  • 32 percent of high school graduates in the state of Alabama enrolled in two-year colleges
  • 31 percent enrolled at a four-year college
  • 37 did not continue into higher education in the year after graduating from high school

Of those Alabama high school graduates enrolling in higher education:

  • 91 percent went to college in-state
  • 9 percent went to college in another state
  • 93 percent went to a public college
  • 7 percent enrolled at a private college

Variation by System

A deeper dive in the data shows how diverse the state’s educational eco-system is. Across the state, systems vary widely in the percentage of graduates who go on to higher education. Some patterns are predictable: affluent suburban districts tend to send most of their graduates to college at four-year colleges and universities. In general, high schools where more students are affluent have a greater share of students going on to higher education. In schools where poverty rates are higher, a smaller share of students go on to higher education (See this chart that compares college-going rates with the proportion of poverty students at a high school). However, a greater variance appears when the percentage of students going to two-year colleges is considered in the mix.

So, it’s not a surprise to find the Mountain Brook City School System topping the college-going list, with the highest percentage of graduates going on to higher education. Over 90 percent of Mountain Brook’s 2016 graduates enrolled in college, with the vast majority of them (86 percent of the graduates) entering a 4-year college. Only 5 percent of graduates enrolled in a two-year college.

More unexpected is the system that finished third on the college-going list. Brewton City Schools also had an impressive college-going rate of 85 percent, but the destination of Brewton’s graduates was different from Mountain Brook’s. In that system, 48 percent of graduates enrolled in a two-year college, while 37 percent went to four-year schools.

Those varying paths toward achieving a high college-going rate continue throughout the rankings.

Among the top 20 systems, 9 systems lean heavily toward 4-year college-going and 11 lean more heavily toward 2-year college going.

Variance by High Schools and Within Systems

When examining the college-going rates at individual high schools, the same contrasting picture of college destination is apparent. Some high schools achieve a high college-going rate by sending most graduates to four-year schools, while others send a high proportion of students to two-year colleges and thereby have high college-going rates.

In some systems, there is a significant variance among the high schools within the same school system. This is particularly true in systems that have magnet high schools (schools where students from throughout the district can apply to pursue advanced academic options).

This is most readily apparent in Montgomery County. Three magnet high schools in the Montgomery County system, Brewbaker Technology Magnet High School, Loveless Academic Magnet Program, and Booker T. Washington Magnet High Schools rank in the top 10 among high schools for the percentage of students enrolling in college the year after graduation. All three send close to 90 percent or more of their graduates to college, and most of them to four-year schools. By contrast, of the 2016 graduates of Lanier Senior High School, only 34 percent enrolled in higher education, according to the Clearinghouse data.

Where do we want to go?

In terms of national comparisons, Alabama has historically ranked low in educational attainment. The U.S. Census Bureau estimates 34 percent of Alabama’s population between the ages of 25 and 64 have an associate’s degree or higher. That ranks Alabama 9th lowest among U.S. states.

In order to increase Alabama competitiveness, Alabama high schools need to:

  • Continue increasing preparation levels of high school graduates
  • Identify and employ effective approaches for connecting students to higher education enrollment and financing opportunities

Colleges and universities need to:

  • Increase outreach to Alabama high school students
  • Address problems of access and affordability
  • And once in college, schools need to work with students to increase student persistence and graduation rates

Better Revenue in 2017 Means Easier Budgeting in the New Year

As the Alabama Legislature returns to Montgomery today, it faces an unusual situation: a relatively stable financial picture.

Both the state’s main checking accounts, the General Fund and the Education Trust Fund (ETF), grew at a relatively healthy pace in FY 2017, both up about 4 percent over FY 2016. The traditionally anemic General Fund ended with an $80 million surplus, significantly exceeding estimates. The ETF met estimates and ended with a $1 million surplus.

Since the current year budget (FY 2018) set spending levels at virtually the same level as 2017, budget writers can anticipate additional surplus funds by the end of 2018, creating a favorable climate for writing the 2019 General Fund budget.

On the spending side, Medicaid finished FY 2017 with lower than anticipated costs. Rolling that surplus forward into the FY 2018 budget also should make budgeting for 2019 easier.

And while the implications are yet to be calculated, the tax cut at the federal level will also be good for revenue collection in Alabama. When federal taxes are cut, Alabama tax revenue goes up. That’s because federal income taxes are deductible when calculating Alabama taxes. Thus the money individuals and corporations won’t be sending to Washington will be taxable at the state level, increasing revenue.

While the Legislature won’t be facing a budget crisis this year, there will be struggles. Unless Congress restores federal funding for the Children’s Health Insurance Program, lawmakers will have to scramble to find money to pay for the program or curtail insurance coverage for the 77,000 low-income children enrolled in the program.

Also, the perennial problem of funding for prisons will be front and center. The Alabama Department of Corrections has requested a $90 million increase in funding to help it comply with court-ordered improvements to mental health services as well as paying for basic improvements to facilities and increases in operating costs.

A Closer Look at the Final Numbers for 2017

Traditionally, the ETF has grown faster than the General Fund, since it draws on income and sales taxes. Those taxes tend to grow when the economy is healthy. The General Fund relies on a hodgepodge of other taxes, which haven’t tended to grow with the economy. However, in recent years, legislators have shifted some sales and use taxes into the General Fund, allowing that fund to benefit from growth.

Legislators can take cheer in the fact that changes they’ve made in recent years to shift growth taxes into the General Fund helped that fund grow at a rate about even with the education budget.

However, some of the 2017 increases are not likely to be sustained over time. For example, a new tax, the Simplified Sellers Use Tax, a voluntary 8 percent tax on sales paid by Internet retailers without a physical presence in the state, was a new revenue source. Overall, for 2017, the tax, referred to the “Amazon tax,” brought in $25 million to the state in its first year of collection. Of that total, 75 percent, or almost $19 million, went to the General Fund, while the remaining 25 percent, or $6 million, went to the ETF.

That $25 million actually represents half of what the tax brought in. The other half of the tax is distributed to cities and counties, 25 percent to cities and 25 percent to counties, based on population. The tax will likely continue to grow but won’t grow as fast since the increase this year results from the fact that it is a new tax.

The shift of some of those growth taxes away from the ETF has led to slower growth in that fund. In comparison to other states, Alabama has lost ground on per-pupil spending on K-12 education in recent years.


Education Fund

Receipts to the ETF in 2017 were up by 4.19 percent compared to 2016. But that increase comes with a caveat. In 2016, $34 million was deducted from overall sales tax receipts and diverted to the Alabama Prepaid College Tuition Program (PACT). In 2017, there will be no diversion and the allocation to PACT will be paid out of the ETF. Accounting for that difference, the actual growth in the revenue flowing to the ETF is more like 3.6 percent.

While the bulk of the increase in the ETF was provided by income and sales tax growth, the addition of the Simplified Sellers Use Tax provided a $6.5 million boost to the ETF. The Mobile Telecom Tax continued a multi-year decline as cell phone companies categorize a greater portion of billing to data services rather than calling. Data plans aren’t subject to the tax.

Revenue SourceFY 2016FY 2017Change% Change
Income Tax$3,722,129,992$3,892,525,501$170,395,5094.58%
Sales Tax$1,744,468,414$1,811,657,811$67,189,3973.85%
Utility Tax$376,625,096$387,966,309$11,341,2133.01%
Simplified Sellers Use Tax$0$6,545,297$6,545,297NA
Use Tax - Remote$4,985,996$6,913,726$1,927,73038.66%
Transfers & Reversions$402,865$404,672$1,8070.45%
Insurance Premium Tax$30,993,346$30,993,296-$500.00%
Privilege License Tax$129,773$112,337-$17,436-13.44%
Hydroelectric KWH Tax$508,723$473,797-$34,926-6.87%
Use Tax$152,082,201$151,598,885-$483,317-0.32%
Beer Tax$22,909,170$22,231,590-$677,580-2.96%
Mobile Telecom Tax$17,700,484$15,904,023-$1,796,461-10.15%

Income Tax Detail

Looking more closely at the details of income tax collections, individual income tax gross receipts were up 3.31 percent, or $135 million. Corporate income taxes were up more than 10 percent, or $42 million. When refunds are factored in the net receipts to the ETF from income taxes were up 4.58 percent, or $170 million.

Income Tax DetailFY 2016FY 2017Change% Change
Individual Receipts$4,071,791,983$4,206,538,511$134,746,5283.31%
Corporate Receipts$416,975,401$459,875,408$42,900,00710.29%
Total Receipts$4,488,767,384$4,666,413,918$177,646,5343.96%
Individual Refunds$582,735,210$594,871,933$12,136,7232.08%
Corporate Refunds$84,470,852$78,221,972-$6,248,880-7.40%
Total Refunds$667,206,062$673,093,905$5,887,8430.88%
Revenue Dept Admin$49,046,548$49,046,547-$10.00%
Property Tax Relief$50,384,782$51,705,847$1,321,0652.62%
Political Party Contributions$0$42,118$42,118
Total Deductions$99,431,330$100,794,512$1,363,1821.37%
Net Income Tax to ETF$3,722,129,992$3,892,525,501$170,395,5094.58%

Sales Tax Detail

Gross receipts from the sales tax were up just 1.84 percent, but the net distribution of the sales tax to the ETF was up 3.85 percent over 2016. That higher net distribution is due mainly to two factors. First is the change to how that PACT money is accounted for. The second is a reduction in the amount refunded to the Department of Human Resources for sales taxes paid by the Supplemental Nutrition Assistance Program (SNAP). Since less was spent on SNAP this year, the state refunded $5 million less to DHR.

Sales Tax DetailFY 2016FY 2017Change% Change
Gross Receipts$2,230,184,536$2,271,145,936$40,961,4001.84%
Revenue Dept Admin$61,445,499$67,731,645$6,286,14610.23%
County Payments$378,000$378,000$00.00%
PSCA Debt Service$202,832,582$204,735,005$1,902,4230.94%
Auto Sales - SGF$96,478,391$100,823,695$4,345,3044.50%
GF Excess Discount$11,526,149$12,032,478$506,3294.39%
SGF Parks Bonds$8,206,200$8,206,200$00.00%
AAC School Tax Credits$374,704$356,394-$18,310-4.89%
PACT Sales Tax$33,952,000$0-$33,952,000-100.00%
Total Deductions$485,716,122$459,488,125-$26,227,997-5.40%
Net Sales Tax to ETF$1,744,468,414$1,811,657,811$67,189,3973.85%

General Fund

The biggest contributor to the gains in the General Fund in 2017 was the tax on insurance company licenses. According to budget analysts, this revenue source saw a drop during the Great Recession indicating that in tight financial times, people were forgoing life insurance coverage. In FY 2017, it appears that incomes had recovered enough that more people were restoring coverage. Also, premiums on property insurance have increased due to natural disasters.

The corporation tax, which is levied on out-of-state businesses licensed to do business in Alabama, saw a $19 million increase. That’s thanks not only to an increase in corporate profits but also to the dwindling amount paid out in funds from the tax set aside to pay claims on a business privilege tax that was ruled unconstitutional. With those claims mostly paid out, the full proceeds of the tax are available.

The $7 million increase in proceeds from the unclaimed property fund results from efforts by the Alabama Treasurer’s office to disperse excess money built up in that fund. The growth in the proceeds from this source is unlikely to continue.

The Use Tax, paid by companies buying materials from out-of-state, also increased with the pick up in economic activity. Bank profits appear to be up, producing a boost in the Financial Institutions Excise tax. Taxes on oil and gas production were up as prices rose. Auto sales taxes continued healthy growth, as did the lodging tax, spurred by growth in tourism. As the Federal Reserve increased interest rates, interest income on state deposits also increased.

The biggest loss in revenue came in the miscellaneous category. In 2016 that category was inflated due to settlements from TransOcean and BP related to the BP Oil spill. In 2017, a $50 million payout from BP made up most of the miscellaneous revenue. In 2018, that miscellaneous revenue will drop further because the remaining payouts from BP starting in 2018 are pledged to pay off bonds. Also affecting the bottom line, in 2017, the Legislature chose to decrease the amount transferred into the General Fund through transfers and diversions. During tougher budget years, the Legislature required some agencies to transfer fees and other revenue collected by the agency into the General Fund. In 2017, the Legislature decreased those required transfers by about $13 million dollars.

 FY 2016FY 2017Change% Change
Insurance Company Licenses$293,534,706$319,814,875$26,280,1708.95%
Simplified Sellers Use Tax$841,382$19,635,891$18,794,5092,233.77%
Corporation Tax$56,831,934$75,499,764$18,667,83032.85%
Abandoned Property$45,000,000$52,000,000$7,000,00015.56%
Use Tax$178,951,918$184,790,861$5,838,9433.26%
Use Tax - Remote$14,958,062$20,741,255$5,783,19338.66%
Financial Institution Excise Tax$22,246,274$27,633,823$5,387,54924.22%
Oil and Gas Production$29,481,805$33,943,406$4,461,60115.13%
Sales Tax$97,844,307$102,230,663$4,386,3574.48%
Interest on State Deposits$9,533,292$13,550,218$4,016,92642.14%
Ad Valorem Tax$150,853,517$154,429,888$3,576,3712.37%
Lodgings Tax$46,869,544$49,851,286$2,981,7426.36%
Mortgage Tax$28,292,880$29,886,763$1,593,8835.63%
Motor Vehicle Licenses$44,210,293$45,143,979$933,6862.11%
Freight Line Equipment$4,028,577$4,749,814$721,23717.90%
Lease Tangible Personal Property$76,634,471$77,297,544$663,0730.87%
Court Costs$61,282,678$61,860,771$578,0930.94%
Sales Tax Discount-Parks Bonds$19,732,349$20,238,678$506,3292.57%
Deed Record Tax$9,478,709$9,978,359$499,6505.27%
Tobacco Tax$8,739,383$9,220,768$481,3855.51%
Oil Company Licenses$8,026,984$8,383,195$356,2114.44%
Use Tax Discount$2,940,282$3,216,163$275,8819.38%
Vapor Products$1,147,675$1,361,915$214,23918.67%
Auto Title Tax$23,026,791$23,116,469$89,6780.39%
Tobacco Settlement$2,004,710$2,070,858$66,1483.30%
Securities Commission$9,420,790$9,457,109$36,3190.39%
Public Safety$17,561,609$17,587,450$25,8410.15%
Judicial Administration$102,779$99,655-$3,123-3.04%
Manufactured Homes Registration Fee$553,107$544,840-$8,267-1.49%
Privilege Licences$5,067,963$4,955,113-$112,850-2.23%
Pari-Mutuel Betting$1,400,662$1,226,025-$174,637-12.47%
Hazardous Waste$208,997$34,219-$174,778-83.63%
ABC Board$100,816,514$100,623,508-$193,006-0.19%
Driver License$17,443,036$16,642,064-$800,972-4.59%
Public Utility$24,169,859$23,198,681-$971,178-4.02%
Cigarette Tax$164,746,858$163,313,105-$1,433,753-0.87%
Mobile Telecommunications Tax$30,900,967$27,308,041-$3,592,926-11.63%
Interest Alabama Trust$103,310,045$98,040,084-$5,269,961-5.10%
Total From Tax Sources$1,787,375,258$1,875,730,902$88,355,6444.94%
Transfers and Reversions$57,951,577$44,102,869-$13,848,708-23.90%
Bottom Line Total for General Fund$1,845,326,835$1,919,833,772$74,506,9374.04%





Progress Made on Remedial Education

The latest statistics from the Alabama Commission on Higher Education (ACHE) show that Alabama high schools are making progress in producing graduates who are ready for college-level coursework.

According to the new report from ACHE, the percentage of high school graduates who had to take remedial courses upon entering Alabama colleges decreased to 28.8 percent for the graduating class of 2016, down from 30.4 percent in 2015 and 34.6 percent in 2011.

Why is remediation an issue?

In a perfect world, any student graduating from an Alabama high school who wishes to enter college would receive a level of education in high school that would prepare them for college-level courses.

However, that is often not the case. When colleges assess incoming students, the colleges often find that the students are in need of a catch-up course at college before they’re ready to tackle college-level work.

These remedial courses don’t count toward attainment of a college degree. They impose an expense on the students and the colleges, an expense that adds to the time and cost of attaining a college degree.

Alabama’s strategic plan for improving K-12 education, Plan 2020, set a goal of decreasing the remediation rate. When high schools do a better job of preparing students for college-level work, it produces savings for the student, their parents, and the education system in general.

While the goal set in Plan 2020 to reduce the remediation rate by approximately 3 percent a year has not been attained, K-12 schools have made progress.

To explore the statics for remediation and college going for local systems, follow this link. Bear in mind that the ACHE report only captures high school graduates who enrolled in the fall after their graduation in Alabama public colleges. The college-going and remediation rates for schools that send significant numbers of students to private colleges or to out-of-state colleges will not necessarily reflect the outcomes for the entire graduating class.

Progress Being Made

According to the ACHE data, the number of high school graduates in Alabama increased from 44,086 in 2011 to 49,953 in 2016, as the population has grown, and the graduation rate has improved.

The number of high school students enrolling at in-state public colleges has increased as well, though in 2016 the total enrollment number was down slightly in comparison to 2015.

However, the percentage of high school graduates enrolling in Alabama public colleges in the fall after graduation has declined slightly.  In 2016, 48 percent of high school graduates enrolled in Alabama higher education the following fall, compared to 53.4 percent in 2011. Data from other sources indicates that the total post-high school college-going rate for Alabama is around 62 percent (Unlike this set of ACHE statistics, those statistics capture students who go to private colleges or who go to college out-of-state).

In 2016, about half of the enrollees went to a two-year college and the other half to four-year colleges.

Remediation rates are calculated for two subjects: math and English.

The most progress has been made in decreasing the percentage of students having to take remedial English. In 2016, the percentage of students needing remedial courses in English dropped to 13 percent, down from 17 percent in 2013.

The percentage of enrolled students taking remedial math also declined to 24 percent in 2016, compared to 26 percent in 2013.

High School Graduation Rates

Remedial rates and college-going rates are affected by changes in Alabama’s high school graduation rate.  At the same time that the remediation rate has gone down, Alabama high schools have improved the high school graduation rate. In 2011, only 72 percent of students in Alabama high schools graduated on time. In 2016, the most recent year available, 89 percent of students graduated on time according to Alabama’s definition of graduation. To see PARCA’s presentation of 2016 high school graduation rates for the state and local schools, follow this link. 

The rapid rise in Alabama’s graduation rate has sparked some concern about whether Alabama’s rate had become inflated, that Alabama schools had lowered their standards for awarding high school diplomas. In trying to improve graduation rates, the state and local schools had made several changes. Alabama instituted a credit recovery system that allowed students who had failed the class to take targeted instruction to improve their areas of weakness rather than having them repeat the entire course. Alabama also dropped its high school exit exam, which had, in the past, prevented some students from graduating. Finally, the state also changed the way it defined who was eligible to receive a diploma and began allowing special education students taking “Essentials” courses (courses not fully aligned with Alabama academic standards) to count those courses toward graduation.

In 2016, the U.S. Department of Education launched an inquiry into Alabama’s standards for granting high school diplomas. As a result of the investigation and an audit of records, some of the students who took the Essentials classes should not have been counted as graduates under the federal definition of a graduate. After a thorough audit of student records, the 2016 graduation was recalculated removing some of those students in the Essentials pathways from the total counted as graduates. In the end, the graduation rate re-calculated for federal reporting was two percentage points lower than Alabama’s definition of who is a graduate.

The 2016 graduation rate report now includes both a state graduation rate and a federal graduation rate.  The most significant difference between the two rates is found among special education students. According to Alabama’s definition, 72 percent of special education students were counted as high school graduates in 2016. Under the federal definition which excludes the Essentials courses, only 54 percent of special education students were counted as graduates. That’s 1,106 fewer special education students counted as graduates under the federal definition.

Despite the concerns about the graduation rate, the new improved, lower remediation rate reported in the ACHE reports provides evidence that Alabama high schools are providing higher levels of preparation for graduates headed into higher education. However, the decline in the college-going rate also bears watching. The lower Alabama public college-going rate may indicate that some students are going straight into the workforce thanks to improvements in the economy.  It may also indicate some graduates don’t feel adequately prepared to immediately enter college. The cost of college has also continued to rise which may discourage some high school graduates from entering college.

Where do we go from here?

Alabama high schools should continue to increase the quality of education delivered in high school so that students enter college prepared for college-level work. High schools and colleges should also continue to improve efforts to help students apply for and finance a college education. According to the latest available statistics from the National Center for Higher Education Management Systems (NCHEMS), Alabama’s rate for college going immediately after high school is 62.1 percent, slightly behind the national average of 62.6 percent. However, Alabama’s rate is lower than any other Southeastern state, indicating room for improvement.



Remembering PARCA Founder Former Governor Albert Brewer

We at the Public Affairs Research Council of Alabama remember our founder, Governor Albert P. Brewer, who died January 2, 2017, at the age of 88. Gov. Brewer was a lifelong champion of equitable, efficient and effective government for Alabama.

Brewer, who had been elected Lieutenant Governor in 1966, took over as governor in 1968 upon the death of Gov. Lurleen Wallace. In an abbreviated term, Brewer gave the state a tantalizing taste of New South leadership, turning away from confrontational racial politics that had dominated the Wallace years and instead championing reform of state government and the improvement of education.

Brewer established by executive order the first state code of ethics. He declined to fill cabinet positions that had been previously occupied by political operatives. He established a state motor pool, cutting the use of personal vehicles for state business, saving $500,000 a year. He centralized the state’s computer systems saving $1 million.

A former Speaker of the Alabama House of Representatives, Brewer took a hands-on approach to legislating, pushing through one of the most consequential education reform packages ever passed in Alabama. It equalized educational appropriations and raised them by over $100 million, increasing teacher salaries more than 20 percent over two years.  He launched a Constitutional reform effort, established the Alabama Commission on Higher Education, and launched the operations of the state’s Medicaid program.

Despite the dynamism of his administration and the surge of hope and optimism it inspired among his supporters, Brewer was defeated in the 1970 election by George Wallace. Wallace unleashed what is widely considered one of the dirtiest campaigns in American political history against Brewer, featuring overtly racist appeals, altered photos, and false personal attacks on Brewer family members. Brewer’s defeat represents one of the great lost opportunities in Alabama history, according to former Decatur Daily Publisher Barrett Shelton, a lifelong friend of Brewer’s.

“Albert Brewer put a face on Alabama that other people respected, governors around the Southeast,” Shelton said. “Had he been elected governor this would have a different state today, far more advanced than it is today.”

After retiring from politics, Brewer remained committed to improving his native state. As an elder statesman, Brewer was often called upon to chair state government reform commissions, including his most recent service on the Constitutional Revision Commission. This November, voters approved four amendments to the Constitution based on recommendations by Commission. The amendments improved procedures for voting on local constitutional amendments, clarified the impeachment process, granted counties the ability to exercise some limited home rule powers, and replaced outdated language in some articles.

Joining the faculty of Samford University’s Cumberland School of Law in 1987, Brewer led the establishment of PARCA, the Public Affairs Research Council of Alabama; a good government think tank dedicated to the improvement of Alabama state and local government. Gov. Brewer envisioned that PARCA would become a trusted source of objective information for state and local leaders. He gave his time and passion to make that vision a reality, serving as the PARCA Chairman until 2013 and as Chairman Emeritus until his death.

Gov. Brewer’s death is an enormous loss for the people of Alabama. He was one of the greatest leaders and finest people our state has known. We will miss him and we will honor him by continuing the legacy he left for us.


2016 Aspire Results for the Schools and Systems

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New data show Alabama students improving performance in math, reading, and science on the ACT Aspire, the year-end standardized tests given to students across Alabama. In all three subjects, the percentage of students scoring proficient improved, at almost all grade levels.

At the same time, long-term weaknesses persist. While math performance is improving in the early grades, and most encouragingly in 7th and 8th grade, by 10th grade, only 18 percent of students test proficient in math. And in reading, 32 percent of 10th graders scored proficient. Scoring proficient on the Aspire indicates that a student is on track to be ready for college-level work in that subject. The results for 10th graders in reading, math and science are similar to performance levels posted by Alabama student performance on the ACT in 2016. PARCA recently reported on those scores.

In releasing the results, Alabama’s new State Superintendent Michael Sentance noted areas of improvement and showcased schools systems that showed high performance or high levels of gain. But he noted that challenges, particularly in the upper grades, are “clearly daunting.”

This is the third year all schools statewide have administered the Aspire, a suite of tests developed by ACT, a company most widely known for its college readiness test, the ACT.

Statewide, the percentage of students scoring proficient in math rose in all grades, except 10th. This continues the trend of improvement in math, particularly in the early grades, where the gains have been largest.

Math All Grades Compared 2014-2016 with 10

In reading, the percentage of students scoring proficient also improved in all grades 3-8, except for 6th grade, which saw 42 percent of students scoring proficient compared to 43 percent of students in 2015. The improvement in reading proficiency, while not dramatic, is better than last year’s results when performance was flat or slightly declining in comparison to 2014.

This is the second year that all students in grades 3-10 took an Aspire assessment for science. Again, in all grades the percentage of students scoring proficient improved except 6th grade where the proficiency percentage matched the 2015 level.

Students take the Aspire again in 10th grade. The results are shown below. For 2016, students took the reading assessment rather than the English assessment that they’d taken the previous two years. That means comparison year-over-year comparison data is not available. However, these 10th-grade results are similar to those Alabama has typically produced when taking the ACT. In 2016, 22 percent of the graduating class of 2016 scored at the college-ready level on the ACT; 22 percent in science; 32 percent in reading.

Speaking to the State Board of Education, Sentance said that Alabama needs to improve its performance and pointed to the Chicago Cub’s historic World Series win this fall as evidence that there’s no curse that can’t be broken with sustained effort.

State School Board member Mary Scott Hunter agreed and added a quip: “We are not going to wait 100 years,” she said.

The interactive data tool below allows for in-depth exploration of the results at the system and school level. Use the available filter to select for your system and school results. When making comparisons across schools and systems, it is important to keep in mind the demographic mix of the student body. Across Alabama and the nation, the proficiency rate of poverty students lags about 30 percentage points behind the proficiency rate of nonpoverty students. Schools and system that serve large numbers of students from poverty households tend to show lower overall proficiency rates when compared to schools with lower poverty rates. In the 2016 Alabama Aspire results, that gap persists.

Another important note on the data: To protect student privacy, the State Department of Education does not publish results for demographic subgroups where there are only a small number of students in that group. Therefore, in instances where there are a small number of students in the test group, no results will appear.

2016 ACT Results by System and School

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Alabama’s 2016 school and system-level results for the ACT, the widely-known test of college readiness, are now available. With the interactive charts posted below, you can explore how well your local public school system or high school is preparing students for college-level academics.

The 2016 results are for those students who graduated from high school in 2016. Compared to 2015, both more graduates and a higher percentage of graduates took the test in 2016. The percentage of tested students demonstrating college readiness in English, science and reading fell slightly from 2015 levels, while the percentage found to be college ready in math and the percentage of students achieving all four benchmarks remained steady. The average composite scale score for Alabama students was 18.7.

This is the second year of results for which the state of Alabama made the ACT available to all students. In the past, only students who were college bound and who paid for the test themselves took the test. Now, it is offered to all high school students who take the test in their junior year. Some take it again in their senior year. The results reflect the final performance level of students who graduated from high school.

Because all Alabama students take the ACT, Alabama’s results shouldn’t be compared to the national average or to other states in which a more limited number of students take the ACT.

The ACT is one of several measures that 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


The cumulative college and career readiness rate for the Class of 2016 has not been published yet. For the graduating Class of 2015, the State Department of Education reported that 68 percent of graduates 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 the 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.

In 2016, statewide, 50 percent of students scored college ready in English (down from 52 percent in 2015); 32 percent achieved the benchmark in reading (down from 33 percent); 22 percent in math (level with 2015); 22 percent in science (down from 24 percent in 2015). Only 15 percent of students statewide scored, met or exceeded all four college-ready benchmarks (level with 2015).

This year’s ACT results follow a similar pattern to results on the Aspire, the standardized tests given to children in grades 3-8 and 10th grade. 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 the statewide results, that gap in ACT performance can be seen when comparing the contrasting results between different demographic subgroups. For example, the percentage of nonpoverty students meeting or exceeding the benchmark in English is 68 percent, while the percentage of students from poverty households who meet or exceed the ACT English benchmark is 35 percent. The nonpoverty vs. poverty gap is 27 percentage points in reading and 24 percentage points in both math and science.

One warning when exploring the data: while the data provided by the state allows comparisons between subgroups, it is, in some cases, inaccurate where the poverty and nonpoverty results are concerned. The state classifies students as falling in the poverty subgroup if they are eligible to participate in the National School Lunch Program. Traditionally, students qualified for the free or reduced school meals because their family qualified for food stamps or other poverty relief programs. Additional students from families with documented financial need could also be deemed eligible. More recently, the federal government began allowing schools and systems with a high percentage of poverty students to offer free lunches to all students. In those schools, all students are included by the state in both the poverty and nonpoverty results. A list of participating schools and systems can be found on the State Department website. Consequently, care should be taken when making performance comparisons.

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.