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Kay Ivey on Alabama PACT Program: Then and Now

by: countrycat

Fri Mar 06, 2009 at 17:00:00 PM CST


Update.... Rats, all of them!  See my comment on the flip.  Although Kay Ivey was in charge, this appears to be a bipartisan trainwreck.

I just have to ask... is it a Republican thing?  Being completely blindsided by seemingly foreseeable events?

We had National Security Advisor, Condeelza Rice, who famously stated that "nobody could imagine" that terrorists might fly planes into buildings.  And don't forget President George Bush who also "couldn't imagine" the levees breaking in New Orleans.

Now, it's Alabama State Treasurer, Kay Ivey, and the PACT board who are shocked, yes shocked, that the stock market downturn has caused the program to teeter on insolvency.

In 2006, Democratic candidate for Treasurer, Steve Segrest expressed concern about the $70 million deficit the program had in 2006, up from $50 million in 2004. Ivey's response?

Ivey dismissed Segrest’s claims that the program is in trouble. She said the program is healthy and is helping Alabama families send children to college.

More about this on the flip...

countrycat :: Kay Ivey on Alabama PACT Program: Then and Now

Ivey was at her peak when she ran for re-election in 2006.  The Florence Times Daily praised her in terms only slightly less glowing than proud grandparents use at medical and law school graduations:

For those saving money for their children's education, Ivey has been a genuine hero. She helped provide tax incentives for people to save money, and she helped create qualified withdrawals from the state's 529 college savings plan that are exempted from state income taxes. Her goal in the next four years is to make contributions to the 529 plan tax deductible. That should lead to more people investing in the savings plan.

Ivey's opponent in the race, Democrat Steve Segrest, says the PACT program is not as strong as it should be and would form a commission to study plans in other states to make Alabama's more attractive and productive.

And speaking of Steve Segrest, the Tuscaloosa News had this to say in 2006:

But Segrest said Alabama’s PACT program lags behind similar programs in other states. He also said that the approximately $70 million deficit shown by the program in 2005, up from about $50 million the previous year, is a cause for concern.

“In Texas, they went so deep into deficit they had to close their program," Segrest said, adding that he doesn’t want to see the same thing happen in Alabama.

He said in a telephone interview that he would like to examine more effective programs in other states to see what works.

“Let’s steal the best ideas from the states that are ranked highest," he said.

Ivey dismissed Segrest’s claims that the program is in trouble. She said the program is healthy and is helping Alabama families send children to college. Despite the deficit increase, she said, the program went from 90 percent funded to 91 percent funded from 2004 to 2005.

In 2007, Kay Ivey was reminding parents that college savings "make a great gift idea!

“You don’t have to get up at 5 a.m. to stand in line to save for college,” Ivey noted. “Simply call my office or visit the Treasury website from the comfort of your own home and give your child a gift that is probably not on their wish list, but one they will thank you for later.”

Last year, even with serious uncertainly in the housing market and rumbles in the financial sector, Ivey was still the state cheerleader for PACT. 

But, as the Huntsville Times noted, "what a difference a quarter makes!"

What a difference a fiscal quarter makes! Back in June, State Treasurer Kay Ivey was telling The Times' editorial board that investing in Alabama's prepaid college tuition program was "a call to action for all of us." On Tuesday, officials were reporting the program was hemorrhaging big time.

Ok... so hindsight is 20/20... but in January of 2009 - barely 2 months ago, Ivey used her "folksy charm" to talk up the PACT program at an Andalusia Chamber of Commerce meeting:

“There are 160 students in Covington County enrolled in the PACT program,” Ivey said. “Y’all have got mo’ chil’en than that,” she said, asking those present to encourage parents and grandparents to participate in the program.

Question for Kay Ivey:  How many o' them "chillun" are lookin at gittin kicked outta school?

And, as late as March 7th, Ivey was still praising the program at the Blackburn Institute Educational Forum in Birmingham.  Mooncat was there, and reported that Ivey herself brought up the PACT program in a positive way:

The state of Alabama has two college savings programs designed for lower income and middle income students ...  families, to be able to save some amount of money if not the whole thing to go to college.  We don't have to live off of always letting the federal government bail us out.  There is room for individual responsibility and we have two college savings programs designed for lower income and middle income folks to participate and ... whatever they say that is less that the child has got to borrow.  So it is an opportunity for self responsibility along the way."

You just have to ask:  What did Kay Ivey know, and when did she know it?  And does she know that she knows it? 

Which is it, Kay?  Either this program's a great investment or it's about to go down the tubes. 

We're waiting for an answer, because you seem to be all over the place on the subject.

 

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This is a disaster for Ivey (4.00 / 1)
Unless she can, ASAP, come up with a plan to save the program and avoid having Alabama kids kicked out of college or denied the opportunity to ever start because the money evaporated.  It's a tiny bit like the Katrina response -- a public relations disaster that is also a human tragedy for a lot of people -- 48,000 families in Alabama.

Work harder and work smarter!

Ivey's chances as Governor. (4.00 / 2)
There are 48,000 families who will not vote for Ivey for Governor. She is now 300 million short, if I have the numbers correct. Just as she took responsibility for the PACT program's success, she should take responsibility for the loss to the students and parents whose dreams may be postponed or dashed.

[ Parent ]
Steve Segrest (4.00 / 1)
Needs to hold a press conference to say "I told you so."  Or some interviews at the very least.  This is a teachable moment.

Work harder and work smarter!

Oops! This is a bi-partisan trainwreck! (4.00 / 3)

How many of us knew that the "official name" for this program is the "Wallace Folsom College Savings Investment Plan?

That's from when the program was enacted in the early 90's. The Wallace refers to George Wallace, Jr., who had run as a Republican.  The Folsom is none other than our Lt. Governor, who's still on the board.

From the 2006 program audit, here are the other members:

The Board of Directors of the Wallace-Folsom College Savings Investment Plan, who are rustees of the PACT and ACES Trust Funds, consists of the following ten members:

 

  • Lieutenant Governor, or his or her designee
  • the Executive Director of the Alabama Commission on Higher Education (ACHE), or his or her designee
  • the State Treasurer
  • Chancellor of the Alabama Department of Postsecondary Education, or his or her designee;
  • one person appointed by the Council of College and University Presidents;
  • one person appointed by the Speaker of the House of Representatives;
  • one person appointed by theLieutenant Governor;
  •  one person appointed by the State Treasurer; 
  • and two persons appointed by the Governor.

I'm trying to find out who - other than Jim Folsom, Jr. and Kay Ivey, these people are.  So, while Kay Ivey was in charge, it appears that she had a lot of help from - I presume - some prominent Democrats.



"The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness."  - John Kenneth Galbraith




I admit my ignorance about Kay Ivey, up until a week ago, I'd never even heard of her.... (4.00 / 1)

But after going to the State of Alabama Treasury Website, and reading the woman's mission statement.....I frankly wonder what her qualifications were for the office?

If you read her mission statement, where in it does anyone get the impression that the woman knows anything about finance, the economy or the stock market?  At best it sounds like she was a glorified bookkeeper turned bureaucrat/politician.

I know she must have more qualifications that I'm too lazy to investigate.....and I realize through my ignorance that I'm part of the problem and not of the solution, but did any new media outlet ever ask her what her investment philosophy was? What does she know about hedge funds? Options trading? Going long, or going short? 

Its pretty obvious the woman knows little or nothing about these financial instruments, if she did, the college fund she oversaw certainly wouldnt have lost 40-50% of its value.

A professional engineer can be held personally liable for designing a flawed, defective bridge, but people like Kay Ivey can't be held personally liable for any of this other than being removed from office.....but thats another issue for another day.

Too bad Kay didn't take a weekend crash course in the stock market and financial instruments before taking office.  To bad the good people of Alabama do not know the right questions to ask of politicians when they are running for an office. 



 

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