“I’m glad that they are looking at it … but will that money be spent in a correct manner so we don’t have the same situation as before?” Jackson asked. “It should be beneficial not only to PACT (Prepaid Alabama College Tuition) members, but not wasteful to all taxpayers.”
Jackson, of Anniston, is one of thousands of Alabama residents who bought contracts with the PACT program. During the last seven years, Jackson has spent $36,000 for two of her three children’s college educations.
“I’m still 10 years out before my first child goes to college,” Jackson said. “I’m very frightened about what’s going to happen with that money.”
Last week, an Alabama Senate committee approved a bill that would pump approximately $236 million into the PACT program from the state’s education trust fund during an eight-year period. Sen. Ted Little, D-Tallapoosa, who is the bill’s sponsor, has said he hopes it or a consensus bill will make it to the Senate floor around Thursday.
Ken Barber, who represents the Anniston/Oxford area for the Save Alabama PACT organization, said he and the group supports the bill.
“I think it would be good for the organization,” Barber said. “We support anything that makes the state take responsibility for the contracts they provided.”
Sen. Del Marsh, R-Anniston, said he is glad to take a look at the bill, but is not ready to sign off on it.
“I want to see if it limits tuition increases,” Marsh said.
Marsh said the increasing cost of college tuition is one of the reasons why the PACT program is having financial problems.
“Something has got be done to get a hold on tuition,” he said.
The PACT program, launched in 1991, had parents pay a fixed amount with the understanding that when their child finished high school, the state would pay four years of tuition at a state university. The plan worked until tuition began rising faster than the program’s trustees planned for. Then the economic crash of late 2008 cut the value of the plan’s investments to about half of the future tuition costs for families already enrolled in the program.
Jacksonville School Superintendent Eric Mackey is not against helping PACT members, but to him taking money from the state’s education trust fund is the wrong way to go.
“I think it’s a very bad idea personally,” Mackey said.
Mackey said taking money from the trust fund would be another financial blow to schools already hurting from state proration.
“Schools are already looking at teacher cutbacks due to the economy and they may be looking at more by taking money from the trust fund to save PACT,” Mackey said. “That’s not fair.”
According to the Alabama Department of Finance Web site, the education trust fund is the largest operating fund of the state. Among its many funding recipients are the state’s K-12 education and two and four-year colleges and universities. It is mainly funded by individual and corporate income tax, sales tax, utility tax and use tax.
Mackey said the trust fund is supposed to take care of all the students in the state, not just one specific group of students such as PACT members.
He added that if legislators do decide to take money from the trust fund, it should only come from the funds set aside for colleges and universities, since the program is only for higher education.
Like Marsh, Sen. Jim Preuitt, D-Talladega, is also cautious about supporting the new bill.
“We’re coming through a tough year with education trust fund money-wise,” Preuitt said. “It’s looking like we will be in proration again next year. But if it comes to the floor, I will look at both sides.”
Marsh noted that although PACT is a hot topic right now in the Legislature, it is not an immediate problem since the program is expected to have enough money to cover its contract holders until 2014.
“It’s down the road,” Marsh said. “We may want the trust fund to recover more.”
The Associated Press contributed to this article.