Alabama Education Association delegates back taxes
By: Health Insurance
Submitted: 2009-12-08 14:48:29 | Word Count: 690
Delegates at the Alabama Education Association's annual delegate assembly endorsed raising taxes on gambling, soft drinks, cigarettes and corporations to raise revenue for public schools and colleges, AEA officials said Saturday.
But the 800-plus delegates, who set policy for AEA, also discussed layoffs and salary reductions as ways state legislators might balance spending with revenues in the 2011 fiscal year, which starts Oct. 1.
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Delegates voted against endorsing layoffs and salary cuts. But they did discuss, at length, those and other ''worst-case" options, said Anita Gibson, president of AEA, which has 104,000 members who are active or retired teachers or other public school employees.
The resolution that spelled out some of those options said in part that AEA recognizes that the 2011 fiscal year ''may be one of the toughest financial years that public education has faced in Alabama's history."
Gibson and AEA executive secretary Paul Hubbert, a powerful lobbyist at the State House, said the possibility of cost-ofliving raises next year wasn't seriously discussed at the delegates meeting. ''The assumption is: There won't be any," Hubbert said.
Gibson said, ''We realize how bad times are."
Delegates at the annual meeting, which ended Friday evening at a hotel here, also discussed raising co-payments for visits to the doctor, raising premiums and other options for increasing by as much as $130 million a year the outof- pocket costs paid by teachers and others covered by the Public Education Employees' Health Insurance Plan, or PEEHIP.
Hubbert chairs the PEEHIP governing board. He said limited or maybe even no growth in state Education Trust Fund spending next year may force the board to raise out-of-pocket expenses by more than $100 million to help offset the steadily rising cost of health insurance.
Hubbert noted that tax revenues and spending for education will depend on whether and when the economy recovers, and how quickly. ''It looks like we've bottomed, but it doesn't look like we'll have a whole lot of new revenue to deal with," he said.
Spending from the trust fund, the main source of state money for public schools and colleges, peaked at $6.69 billion in the 2008 fiscal year. It fell by $1.01 billion, or 15.1 percent, to $5.68 billion in fiscal 2009, which ended Sept. 30.
This year, after a 7.5 percent cut ordered by Gov. Bob Riley, trust fund spending is budgeted at $5.28 billion. But with $513 million in federal stimulus money, combined spending this year is budgeted at $5.79 billion, about $109 million, or 1.9 percent, more than last year's trust fund spending.
About $511 million in federal stimulus money will be left for fiscal 2011, but state budget officials haven't yet revealed their trust fund revenue forecasts for next year.
Among the tax increases supported by AEA delegates were:
> A tax on video bingo and other gambling of at least 20 percent of profits, excluding some nonprofit groups, estimated by AEA to raise at least $100 million a year.
> A 10-cents-per-pack tax on cigarettes and 10 percent tax increase on other tobacco products, estimated to raise $42.5 million a year.
> A 5 percent tax on many kinds of soft drinks, estimated by AEA to raise $150 million a year.
> Ending unspecified corporate income-tax loopholes. AEA made no revenue estimate.
''New taxes are going to be difficult in times of economic distress like we're experiencing," said Rep. Richard Lindsey, D-Centre, who chairs the Education Appropriations Committee of the state House of Representatives.
But Lindsey called a tax on existing gambling ''a remote possibility," and said he had no problem with closing loopholes ''if they're genuine loopholes that need to be limited for tax fairness."
