The lost revenue won't lead to cuts in programs, said Rep. Jay Love, R-Montgomery, but it will make a dent in the revenue increases legislators expected for 2014.
"We just didn't spend that money," said Love, chairman of the Ways and Means Education Committee.
Love's committee, which oversees the state's education budget, held a public hearing Tuesday to accept input on the $5.74 billion proposed Education Trust Fund budget. Alabama runs two budgets, one for education and another, called the General Fund budget, to fund other functions.
The Tuesday hearing was the public's first glance at the House committee's spending proposal. Earlier this year, Gov. Robert Bentley proposed a $5.83 billion layout for schools — a figure that included a projected $277 million increase in revenue compared to 2013.
The state's schools are funded largely by income and sales taxes, which budget officials expect to grow as the economy continues to recover from the 2008 recession.
Lawmakers took a chunk out of that growth earlier this year when they passed the Alabama Accountability Act, a bill that allows an income tax credit, estimated at about $3,500, to parents of students in "failing" school districts who send their children to private schools. The cost of that bill, in potential revenue, has been unclear, largely because there's no clear list of "failing" schools so far.
Love said the initial revenue projections in the House committee were about $20 million lower than the governor's numbers. He said the Accountability Act would take away another $50 million to $60 million in revenue. Combined with lost federal revenues due to the mandatory budget cuts known as "sequestration," the tax credits would cause education revenues to fall about $70 million short of of the original House projection, he said.
The draft House budget echoed many of the themes in the governor's budget proposal. Most budget items were level-funded, getting the same amount of money they got in 2013. The House version boosted funding for the state's pre-kindergarten program by 62 percent to a total of $31 million, in keeping with the governor's plan to expand the program. Love said the budget included funding for a 2 percent teacher pay raise.
In his budget, the governor had asked for a 2.5 percent pay raise for teachers — the first pay raise for teachers since 2008.
At the Tuesday budget hearing, teachers' groups asked for more. Henry Mabry, executive secretary of the Alabama Education Association, said he would rather see a 5 percent raise. Recent changes such as an increase in teachers' contributions toward their retirement, he said, amount to a 7.5 percent pay cut since 2008.
Vi Parramore, of the teachers' union American Federation of Teachers, asked for a 10 percent raise to be implemented over the next two years. She also criticized legislators for setting aside $5 million for a liability insurance program for teachers — a move that union leaders said was an effort to kill teachers' unions, which provide that insurance to members.
"They do not feel valued," Parramore said of teachers. "They do not feel that you're putting children first."
Love said the liability insurance program was created to fill a gap in state benefits.
"The only people in Alabama I've found who do not have liability insurance paid by their employer are teachers and education support staff," he said.
Universities, including Jacksonville State, get an increase of 1.4 percent in the House committee's proposed 2014 budget. That would give JSU $493,000 more than last year's $35.3 million budget -- but it would be about $193,000 less than the governor originally requested.
JSU President Bill Meehan said he was glad to see any increase, though he said an increase in the amount employers are expected to pay into the teachers’ retirement system would cost the university $750,000 in 2014.
“The increase is not enough to cover our loss,” he said.
The budget would cut $10 million from the Alabama Reading Initiative, or ARI the statewide reading program that has long earned praise from state officials.
The cut was on the wish list of state schools Superintendent Tommy Bice, who told The Star in November that money from ARI could be used to create a program for scholarships and teacher recruitment called Teach for Alabama.
Bice said at the time that ARI had become well-established and didn't need as much funding as in past years because teachers can now train other teachers.
Becky Gerritson, leader of the Wetumpka Tea Party, claimed at the budget hearing that the Department of Education was already diverting money from ARI to implement Common Core academic standards, a multi-state set of academic standards that has drawn criticism from conservative groups.
"These programs are so successful they're being copied by other states," Gerritson said of ARI.
Bice said there was no diversion of ARI funds to Common Core, and Education Department officials noted that they'd just completed an audit with no adverse findings.
The House budget proposal would increase state funding for transportation to $300.9 million, up $6 million from last year but around $4 million less than the governor requested. Some school leaders said the high cost of transporting kids to school was causing trouble for school districts.
"Half of the children in Alabama depend on us to get them to school," said Eric Mackey, director of the School Superintendents of Alabama. Bice, too, said the cost of transporting students was a concern. The schools with the highest percentage of students who ride the bus are usually also the poorest districts, he noted.
Bice is expected to release a list of "failing" schools sometime in coming weeks — a list that could help clarify the Accountability Act's potential cost to the state. Because the act offers four different definitions of a failing school, the number of failing schools, and the number of parents qualifying for the tax credit, has been unclear. One rule would list the lowest performing 10 percent of all public schools as failing — about 150 schools.
Bice said Tuesday that the actual list could be shorter than that. He said it could be within the ability of the state to take "failing" schools off a failing list if they show improvement over time, even if they're in the bottom 10 percent.
"If you do it by percentage, you're always going to have failing schools," he noted.
The Ways and Means Education Committee could make a decision on the budget proposal as early as Wednesday. Approval by the committee would move it on to the full House for approval.
Capitol & statewide correspondent Tim Lockette: 256-294-4193. On Twitter @TLockette_Star.