The Alabama State Department of Education is proposing no increase in funded personnel for the second consecutive year as it prepares for the next fiscal year.
During a discussion of the department’s proposed operating budget, officials said the legislature increased funding to cover a 2 percent pay raise for state employees beginning October 1, along with higher employee benefit costs.
The additional funding will allow the department to cover those increases without drawing from reserve funds. State Superintendent Eric Mackey noted that previous legislatures approved pay raises without providing enough funding to cover them, forcing the department to use reserve funds to make up the difference.
“We are, for the second year, telling the legislature, we don’t want any more personnel funded,” Mackey said. “We just think that you can always use more people, but we can manage what we have.”
Mackey said the department would prefer to see additional funding flow to local school systems rather than add positions to its own workforce.
The state has also fully funded the increase in employee insurance costs in the proposed budget. However, officials warned that rising health care and prescription drug costs could force changes to the state’s insurance plans in the future.
“I just think it’ll have to change. I just don’t see how we continue to keep it without some changes in the plan,” Mackey said.
Potential changes could include higher premiums, increased copays or a combination of the two. Prescription drugs are among the fastest-growing costs, particularly newer medications that can carry high prices while under patent protection.
The growing number of retirees receiving health coverage also contributes to rising costs. Mackey said the number of retirees covered by PEEHIP is expected to continue growing and currently exceeds the number of active employees.
“If there’s no charge for retirees, because the state only has a way to collect from active workers. That’s why the calculation is so high because even though the stipend that the employer pays looks really high, it’s actually really covering two people right now, because we have a retiree for every active employee,” Mackey said.
Despite the potential for changes, officials said affordable health insurance remains an important recruitment and retention tool, particularly for support employees such as cafeteria workers, custodians, teacher aides and office staff.
The department is also expecting a notable increase in equipment spending, largely because computers and other technology purchased with federal COVID-19 relief funds are reaching the end of their useful lives.
Mackey said some department employees have already been told to wait until October 1 for computer replacements. The same issue is emerging in local school systems, where many districts replaced large amounts of technology with federal relief funds several years ago.
“We’ve been told that we’ve got a list of people that need computers replaced,” Mackey said.
The department said it has heard from local superintendents who are beginning to face their own technology replacement cycles. Many districts are using portions of their Alabama Advancement and Technology, or A&T, funds to purchase new computers and other equipment.
Mackey said the technology replacement issue could remain a challenge for the department and local school systems over the next several years as pandemic-era equipment continues to age.
The State Board of Education is expected to consider adoption of the department’s budget in September.
