July 2012 Group Watch: Alabama Education Fund to Avoid Cuts
The Alabama Education Trust Fund will collect enough state income taxes and other levies to meet its spending target for the fiscal year and avoid cuts in budgeted spending from proration. The trust fund collected $4.25 billion in October through June, an increase of $269.9 million or 6.8 percent, from the same period a year earlier, according to state finance officials. Tax collections by the trust fund, the main source of state tax dollars for public schools and colleges, need to grow by 5.6 percent in this fiscal year, which ends September 30, to reach this year’s budgeted spending. Lawmakers in May approved spending an additional $40 million from the trust fund in this fiscal year, putting it in a reserve, and spending it in fiscal 2013. Gross sales tax collections before payment of school bond debt and other deductions increased by 5.5 percent. Gross individual income tax collections before tax refunds increased by 4.3 percent. Net combined individual and corporate income tax collections were up 10.9 percent. According to finance officials, revenue collected by the General Fund increased by 21.8 percent from the same period a year earlier. The General Fund received a $266.4 million windfall from the Alabama Trust Fund, which gets most of the natural gas royalties paid the state by companies that pumped natural gas offshore.
