Alabama college and university officials Wednesday cited concerns about the Education Trust Fund, the Public Education Employee Health Insurance Program (PEEHIP), inflation and deferred maintenance during the Alabama Commission on Higher Education (ACHE)’s hearings on the schools’ budget proposals.
Many schools are seeking funding increases out of the budget. ACHE Executive Director Jim Purcell asked Alabama State University how to handle schools requesting more in increases than lawmakers allowed for the overarching budget.
“Are you thinking that they’re going to direct more money to your institution and less money to others?” he said. “How does that work out? When everybody’s asking for, you’re asking for 10%, others are asking for more.”
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ASU President Quinton Ross said it could come from a supplemental increase.
”But I think more and more you probably will see it come in by way of supplemental (appropriations) based on the needs and advocacy of the other universities,” he said.
In the 2023 session, lawmakers passed SB 101 that said Education Trust Fund appropriations were capped at the fiscal appropriation cap or the secondary spending limit, whichever was less.
Troy University Senior Vice Chancellor for Financial Affairs and Online Education Jim Bookout cited an article from the Alabama Daily News which projected a decline in sales tax revenue in fiscal year 2024. Bookout said they had since “tempered” their request.
“When you combine the savings that were created over the tax cuts, realistically, we don’t believe we’re going to receive the same type of supplemental appropriations we’ve been fortunate to receive in the past, especially the past couple of years, not including last year,” he said.
Susan Hayes, chief financial officer and treasurer at the University of Montevallo, was among the schools who had concerns about the potential increase in PEEHIP.
PEEHIP is funded through participating employers based on the number of active employees each month. Most of the employer contribution comes from ETF dollars appropriated to employers.
“Obviously, PEEHIP was a really that was a little bit of surprise for the large amount of the PEEHIP increase this year, along with just overall construction cost and utilities and also the state insurance premium increase, all of that came kind of suddenly,” she said. “Those are just, some of the costs that we’re dealing with and trying to balance everything.”
Inflation also contributed to rising budget requests, official said. Some schools also cited deferred maintenance as reasons for increases.
Alondrea Johnson Pritchett, vice president for business and finance at Alabama State University, cited both reasons among reasons for a 10% budget increase.
“We also have in this budget request an across the board increase, salary increase by faculty and staff with inflation,” she said. “We feel that’s really needed this time.”
The Governor’s Office makes recommendations for the Education Trust Fund budget, which also includes K-12 education, to lawmakers for the upcoming session. The Alabama Legislature, which returns in February, has the final say on the shape and scope of the budget.
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