As many PACT parents and students feared, the "rescue plan" concocted by the Legislature this spring is already in trouble. I can't help but wonder what the chances are that the Legislature (and citizens without PACT contracts) will be willing to revisit the issue - and perhaps allot more money - in future sessions.
When I wrote about the PACT rescue in April, I was concerned that the plan had problems. But, with a daughter starting college in 2 years, I had my fingers crossed that things would be ok.
They're not.
The glaring deficiencies in the rescue plan are already causing problems:
The rescue bill treated higher ed institutions in Alabama unequally, capping tuition for PACT students at non-UA and Auburn universities but paying the full amount to the UA and Auburn systems.
The unseverability clause in the bill means that if the tuition caps are struck down by the courts then the whole bill is scrapped. Generally, bills are passed with the caveat that if any portion of the bill is found unconstitutional, that doesn't affect the other provisions of the bill. And yet, AEA and its legislative allies insisted on the unseverability clause. Brian at Flashpoint wrote about the issue, wondering if it was a deliberate poison pill.
The bill did nothing to address rising tuition costs and in fact made the totally unrealistic assumption that tuition at UA and Auburn wouldn't rise more than 7.5% per year.
More about those tuition increases on the flip - along with the PACT actuarial consultant's warning that double-digit increases threaten the solvency of the program. Again.
It should come as no surprise to anyone that Alabama's government is dysfunctional. Various interest groups fight each other over pieces of what seems to be an ever-shrinking pie. And nowhere is that battle more intense than between the groups associated with K-12 - mainly the Alabama Education Association (AEA) and those allied with higher education - Alabama's college and university system.
Many citizens - including Congressman Artur Davis - have long held that this is a false choice. Instead of pitting the two groups against each other, it makes more sense to view education as a single unit - from Kindergarten to college or career education/technical training.
"A governor can do something to bring people together instead of being a person who picks on faction over another. I want to have a strong relationship with the universities in all their forms: the 2-years, the 4-year universities, the HBCUs, and the independent colleges.
We're going to get our next big economic gains in this state from partnerships with schools in our higher education system. If you look at North Carolina, they have created all kinds of partnerships with higher education and it's led to stronger workforce development. It also has led to a stronger K through 12 component. Because stronger higher education pushes K through 12 to be more competitive and do better.
That's why, once again, this artificial choice between K-12 and higher education is destructive to the kind of workforce we want to build. "
That's how it should be. First let's discuss how it is and how the PACT rescue almost failed due to the conflict.
Democratic candidate for Treasurer, Jeremy Sherer, is offering a possible solution to the growing legislative impasse over bills to save Alabama's Prepaid Affordable College Tuition Program (PACT): the state's unclaimed property fund.
As I noted yesterday, the house-passed bill (HB228) has run into the immovable force that is Rules Committee Chair, Lowell Barron.
Barron objects to the tuition caps for PACT students that are included in the bill and won't allow a Senate vote on any bill that includes caps.
In response to a question about where the money will come from to pay tuition contracts, Sherer suggested that his solution - tapping the state's unclaimed property fund - is the most fair and least painful way to implement a short-term solution while the economy recovers - hopefully soon!
In an interview this week, Sherer stressed the importance of honoring PACT contracts:
PACT was flawed at its inception, due to its lack of tuition controls and lack of oversight from the Legislature. Ultimately, Alabama will spend millions of dollars due to the flawed structure of PACT, which resembled that of a pyramid scheme.
The priority of state leaders now must be to maintain control of PACT's fate and its own legal liability by guaranteeing PACT contracts, and keeping PACT's fate within the Legislature and out of the courtroom.
More information about how Shere's proposed solution worked in Kentucky and more remarks from him on the flip.
Fall 2011 could be the end of PACT, says this disturbing headline from the AP:
Administrators of Alabama's prepaid college tuition plan say it can't pay tuition after the fall semester of 2011 and still have enough money to provide refunds to the 44,000 participants.
[...]
Emfinger and Story said that shows the need for the Legislature to address the program's problems in the current session. The Senate and House have passed separate bills to shore up the program with $236 million, but they can't agree on whether to include a cap on tuition increases.
That has to be a desperation shot across the bow of the legislature. The tuition cap increase is key to the bill's passage or failure.
The university system folks are vehemently - if not violently - opposed to any plan that includes tuition caps. Senator (and Rules Committee Chair) Lowell Barron told Save Alabama PACT that he won't allow a vote on the House bill if the caps are in place. While the AEA will withdraw its support if the tuition caps are removed.
The fate of 45,000 current and future college students is between a Hubbert/Hubbard and a hard place. With a little slice of Barron on top for decoration.
With this mass of motivated, out for blood families and voters looking for a solution, wouldn't you think there could at least be a vote. Lowell Barron is my senator and this is just another in a long line of disappointments.
The legislative session is 2/3's over. tick, tock....
Former Democrat and GOP candidate for governor, Bradley Byrne, is widely considered to be the frontrunner for the nomination. (Danny at the Political Parlor says: "Favorite of the state's GOP establishment is still the one to beat.")
Yet Byrne has found himself pretty much beaten by the news cycle this week. What's amazing is how self-inflicted the wounds are. From PACT to the Bible, Mr. Byrne seems to be having trouble choosing a position and sticking with it.
Furthermore, he's proving to be a candidate who's not just full of what King Cockfight calls "gentle Caucasian charm," but a comparatively thinskinned one too. You have to wonder how he'll stand up under the pressures of a hard-fought primary and/or general election.
It's been pretty amazing to watch Byrne pull off a political hat trick and alienate these three important constituencies... all in one week:
Approximately 45,000 PACT contract holders, their families, and friends.
The Biblical inerrancy crowd that seems to form the base of Alabama's Republican Party.
His own hometown paper - the Mobile Press-Register.
Alabama's troubled Prepaid Affordable College Tuition (PACT) program was in the news yesterday as some legislators search for ways to fix the program.
Representative Greg Wren (R-Montgomery) held a press conference yesterday to announce a package of PACT-related bills:
State Rep. Greg Wren plans to introduce a three-bill legislative package that, if passed, would make it state policy to honor all of the existing 48,000 PACT contracts.
[...]
Wren's package would also redesign the PACT board, make that board report to the state Legislature on an annual basis and report to a new 25-member advisory task force on a quarterly basis. The task force would include legislators and two PACT contract holders from each of the seven congressional districts. Legislators also would serve on the new PACT board.
The state Board of Education Thursday approved tuition increases of 19.7 percent for all of Alabama's two-year community and technical colleges.
As the four-year colleges and universities have increased tuition at rates approaching 10% per year (or more!), the community colleges and two-year colleges have been been the only bright spot as PACT writes tuition checks for contract holders.
The Alabama Prepaid (just kidding) Affordable College Tuition (PACT) Board is meeting tomorrow in Montgomery. If you are a parent, Treasurer Kay Ivey doesn't want you there. From Bob Lowry in the Huntsville Times this morning:
[PACT grandparent Patti] Lambert said Ivey discouraged PACT parents in phone calls from attending the board meeting Wednesday. "She told us to save our gas money and donate it to the program," Lambert said. "I said, 'Kay, I haven't come for years, and look what happened.' "
If you're a PACT parent or grandparent, please consider attending the meeting tomorrow. As Benjamin Franklin said, “A little neglect may breed great mischief.” In the case of PACT, it already has. What's at stake now is how to disentangle the mess and how much pain will be inflicted on PACT holders and their families. Don't neglect the PACT Board again. The RSA report on the PACT debacle is now in the hands of the Governor and members of the Legislature. I suggest you contact your state Representative and Senator to ask them to please read the report and schedule a time to listen to your concerns after they have done so.
The PACT Board of Directors will meet August 19, 2009 at the State Capitol in Montgomery, Archives Room, at 1:30 pm.
August 6, 2009 - We have been informed that RSA has been directed to share the PACT study with the senate leadership and Governor prior to its release to the PACT Board. Additionally, it is not to be released until after the expected special session of the Legislature. A date for the special session has not been set by the Governor at this time. Therefore, the results of this study will not be available to the Board at the meeting August 19th.
Ok now, the last time PACT was in the news, we heard from RSA Deputy Director, Marcus Reynolds, who said that PACT could be saved:
Reynolds said he is still reviewing the study and said he won't release details before presenting findings to Gov. Bob Riley sometime between Aug. 10 and the Aug. 19 PACT board meeting. Then, Reynolds will immediately send copies of the study to lawmakers and release it to the public.
The study was completed weeks ago. The special session just started on the 17th and the Senate is expected to vote on the Jefferson County bill today, thereby wrapping up the session. Surely someone could have taken some time to look at it earlier in the month.
Or they could look at it before next Wednesday! Isn't the PACT issue important enough for Governor Riley and Legislative leaders to work the weekend to review the study? 'Cmon guys! It's not even football season yet!!
Statements from Ron Sparks and Treasurer candidate, Jeremy Sherer, are on the flip.
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As I noted yesterday, the house-passed bill (HB228) has 
Yet Byrne has found himself pretty much beaten by the news cycle this week. What's amazing is how self-inflicted the wounds are. From PACT to the Bible, Mr. Byrne seems to be having trouble choosing a position and sticking with it.
The Alabama Prepaid (just kidding) Affordable College Tuition (PACT) Board is meeting tomorrow in Montgomery. If you are a parent, Treasurer 
