Print this story |
E-mail story |
This story has 3 comments | Add your own |
iPod friendly | Bookmark this
What is this?
Rescue plan proposed for PACT
Published Tuesday, March 17, 2009
MONTGOMERY — A state representative who participates in Alabama's prepaid college tuition program is writing legislation to rescue the financially ailing program and allow it to keep paying full tuition for participants.
Democratic state Rep. Craig Ford of Gadsden said Tuesday he's preparing a bill that would supply about $30 million a year for at least five years. Ford figures that would cover about half of the program's tuition obligations each year and give time for the stock market to recover.
Ford's proposal would use money now going to the state General Fund budget. That has raised concerns from the chairman of a House budget committee.
"There is no question we need to address this. ... But I don't think the General Fund has an obligation to solve this," said Democratic Rep. John Knight of Montgomery, who is chairman of the House Government Appropriations Committee.
Ford has two children enrolled in the program. But he said the main reason he is working on the bill is because he has been flooded with calls from parents and grandparents who sacrificed to invest in the plan, and they expect four years of college tuition for their children and grandchildren when they finish high school.
"The Legislature has got to step in and do something," Ford said.
Ford said he plans to introduce his bill when the Legislature reconvenes next Tuesday.
For at least five years, his plan would use money from the state treasurer's unclaimed property program, which has been going into the state General Fund budget. The unclaimed property program receives stocks, bonds, securities, insurance benefits and other items that have not been claimed by Alabamians or their heirs. It would generate about $25 million annually, Ford said.
His plan would also use $5 million annually from the state's Capital Improvement Trust Fund, which finances the state's economic incentives for new and expanding industries.
Knight, who has a niece in the tuition program, said Tuesday he hasn't seen Ford's proposal, but he doesn't like the idea of using General Fund money that now helps Medicaid, Human Resources, Public Safety and many other state agencies.
Alabama's Prepaid Affordable College Tuition Plan invests the majority of its money in the stock market in hopes the earnings will exceed tuition increases, but it has lost about half of its assets since September 2007. Its assets now equal about half of its future liabilities.
The board that oversees the program will meet next Tuesday at the state Capitol to discuss what it will do about upcoming tuition payments.
Lt. Gov. Jim Folsom Jr. got the Legislature to create the program in 1989 and is now on its board. Folsom said through a spokesman Tuesday he had not seen Ford's proposal, but he is open to all ideas for dealing with the program's problems.
Like Ford, Folsom's two children participated in the prepaid tuition program. His daughter has already finished college and his son is a junior.
In a statement, Folsom urged his fellow board members to stand behind the prepaid tuition program, even though state law doesn't obligate the state to do that. Folsom said the state's promotional materials gave assurances to participants and they created a "moral duty to make good" on the state's perceived promises.
He said the program has enough money to keep paying current tuition costs while searching for a long-term answer.
WOULD YOU LIKE TO SHARE THIS STORY?
Comments
Posted by November162000 (anonymous) on March 18, 2009 at 10:26 a.m. (Suggest removal)
So, the representative thinks that the majority of Alabamians that have no need to participate in PACT should be bailing out the minority of Alabamians that do participate. What a crock. But, that's the mentality these days. I am given no choice but to give my money to educate kids through high school, now this moron thinks I need to pay to send a select few kids through college, including HIS kids. But, as I said, that's the mentality these days; if i get in a bind then big brother is supposed to take money from someone else and give it to me. Brilliant.
Posted by chilly1104 (anonymous) on March 18, 2009 at 9:17 p.m. (Suggest removal)
PACT may have a "moral duty to make good" on its program, but at whose expense? We couldn't afford to buy into PACT when our children were babies. Now that they are going off to college, we're going to have to pay their tuition as they go. As a hard working family, we make way too much to qualify for grants, so we will be repaying student loans for years to come. Why should we have to pay for PACT kids' tuition too? The middle class gets NOTHING! We've gone to work everyday and paid our bills, taxes, and mortgages on time. Our stocks have lost half of their value too. Plus, we're already way over taxed. Hey, Pres. Obama and Rep. Ford, as a reward for our hard work, how about bail us out?! Since we are the ones who will pay for your stimilus packages anyway, here's an idea...allow our children to receive grant money for college, lower our mortgate rates to zero, give us a few months to skip payments without penalty/interest charges, and pay off our VISA cards! Let us get our heads above water enough to pay for our own kids' college tuition!
Posted by eaglehead56 (anonymous) on March 22, 2009 at 1:51 p.m. (Suggest removal)
It escapes me how Alabama is a republican state! Alabama is made up of farmers and tradesmen.... OK and polititions Here again is a story of what happens when you put a republican in charge of the money. When the people want answers about where the money went you get excuses that make no sense, and now it's the old pass the payback to someone else. Most people forget that the republican party was responsible in taking all the regulation off of the finance and banking industry and that if it had been left alone we would find ourselves better off now.
Post a comment (Terms of Use Policy)
(Requires free registration.)