Martin: PACT should repay money

Published 10:37 pm Thursday, March 26, 2009

Rep. Jimmy Martin says the state legislature could help Alabama’s prepaid college tuition plan (PACT), but that PACT should reimburse the legislature when the program has had time to recover.

“It’s not the consensus of legislators that they should bail them out because that was set up as a separate entity of the state of Alabama,” said Martin, who has received numerous e-mails from program investors.

One particular e-mail came from a father who had set aside money for two children but lost money and had to pay the difference out of his own pocket.

Martin made it clear he did not want to be unsympathetic of PACT participants, and he said he would support the movement to bail out the program. But Martin maintains the bailout should be done in the form of a loan.

“The Alabama Legislature does not owe because they did not guarantee the PACT money,” he said. “If the PACT program recovers, I think it should repay the legislature for the money they invested in it.”

Lt. Gov. Jim Folsom Jr. is one of the main people behind the movement to assist the program. Folsom serves on a three-member committee looking for ways to shore up PACT, which has lost about half of its assets due to the turmoil on Wall Street, the Associated Press reported yesterday.

Folsom, who was instrumental in starting the program in 1989, has indicated the bailout plan could include a measure to prevent colleges from increasing tuition for participants, at least for several years.

Martin somewhat disagreed with that aspect of the bailout.

“If the cost of education goes up, how are you going to tell them to absorb it?” he asked.