Alabama

Costing Out | Tax Re-structuring | Advocacy Strategies | Recent Events | Useful Resources

Historical Background

In 1991, the Alabama Coalition for Equity (ACE) and the ACLU of Alabama, filed suits challenging the state's education finance system on adequacy and equity grounds. The cases were consolidated and went to trial in 1992. The trial court's 1993 liability decision, ACE v. Hunt, held for plaintiffs on both the adequacy and equity claims based on the state constitution.

A remedy negotiated among the parties and ordered by the court, in ACE v. Folsom, included performance-based education, professional development, early childhood programs, inclusive special education, and equitable and adequate funding -- to be fully funded within six years. The Alabama Supreme Court upheld the liability order in Opinion of the Justices (1993), but vacated the remedy order in 1997 (Ex Parte Governor Fob James).

Extraordinary Order to Dismiss

In 2002, the Alabama Supreme Court, on its own initiative, in an extraordinary order, re-opened the case, which it had affirmed on four previous occasions, and, in May 2002, years after its appellate jurisdiction had expired, dismissed the case.

Other Advocacy Strategies

Although Alabama education advocates no longer have a court victory to support their efforts, they have launched two major school reform initiatives since the summer of 2002 and continue to work to bring discordant factions together.

More than 20 grassroots advocacy organizations are attempting to build broad support for the State Department of Education's adequacy funding plan and, in November 2002, members of the Alabama business communities unveiled the Campaign for Alabama, which adds important allies to statewide education- and tax-reform efforts.

Costing Out

In October 2001, the state Board of Education submitted a plan for upgrading Alabama's schools to the Circuit Court. The plan called for an increase of $1.4 billion annually, 50% more than the $2.9 billion Alabama was spending that year on its K-12 public schools. This cost study, unlike most, did include structural repairs for school buildings, at $438 million. However, the study was not released to the public and became moot due to dismissal of the case in 2002.

Revenue Shortfalls and Tax Re-structuring Proposals

In 2001, Alabama dealt twice with the problem of revenue shortfalls. Early in the year, the governor proposed 6.2% across-the-board budget cuts ("proration"), including cuts in state school aid. The Alabama Association of School Boards (AASB) and some school districts went to court to challenge the cuts to K-12 education and were opposed by Alabama colleges and universities, which would have borne the brunt of the cuts if K-12 education gained relief. In Siegelman v. AASB (2001), the Alabama Supreme Court held that K-12 education is not protected from proration. Late in the year, with additional shortfalls projected for 2002, the governor called a special session of the legislature. The legislature raised taxes to prevent further cuts to education in the short-term, but additional cuts were made in 2002 and again in 2003.

Education advocates in Alabama believe a major overhaul of the tax structure is needed. However in September 2003, voters defeated a proposal to restructure state taxes by lowering taxes on the poor and increasing them on corporations and wealthy taxpayers.

Recent Events

Recently, a federal lawsuit was filed to challenge Alabama's property tax system. It claims that the state's current system discriminates against minority students by not adequately funding K-12 public schools. The plaintiff attorney seeks class-action status.

Governor Riley has proposed a $107 million, or 2.6%, cut in K-12 appropriations from the Education Trust Fund in 2008-09. The Education Trust Fund is Alabama’s largest operating fund, and its resources are appropriated in a separate bill from all other state spending. According to the Birmingham News, “Riley's budget would boost trust fund spending by a total of $50 million for four programs: pre-kindergarten, using video conferencing to let teachers instruct students in distant schools, and two programs that show teachers how to better instruct students in reading, math and science.” There was no indication as to where the remaining $157 million in cuts would be made.

The cuts in K-12 education are part of a projected $398 million reduction in overall education spending. However, in January 2008, the Legislative Fiscal Office predicted that the Education Trust Fund would have $574 million less in available funds, leading some lawmakers to view the Governor’s projected cuts as optimistic. Thus, it appears as though the $107 million reduction in K-12 appropriations may be a floor, rather than a ceiling.

In March 2008, plaintiffs filed Lynch v. State of Alabama, a federal lawsuit that challenges Alabama's property tax system. It alleges substantial under funding of the state’s K-12 public school system, particularly in rural and majority black schools, based on clauses of the Constitution that were written after reconstruction with the specific intent of limiting funding for schools attended by black children. Today, those clauses continue to limit state and local government’s ability to collect adequate amounts of revenue from local property taxes. In March 2011, U.S. District Judge Lynwood Smith heard arguments in Lynch. Defendants argued that the portions of the Alabama Constitution challenged by the plaintiffs are integral parts of the state’s tax system, and if invalidated, would “throw the entire Alabama tax structure into disarray.”

Useful Resources:

For bi-weekly updates on education issues in Alabama, visit the A+ Education Foundation's website.

Martha I. Morgan, Adam S. Cohen, and Helen Hirschkoff, Establishing Education Program Inadequacy: The Alabama Example, University of Michigan, 28 Journal of Law Reform 559 (Spring 1995)

D. Frank Vinik, The Contrasting Politics of Remedy: The Alabama and Kentucky School Equity Funding Suits, 22 Journal of Education Finance 60 (Summer 1996)

Jeffrey Scott Berman and Drew Dunphy, Building Plans for Reform: Alabama's School Finance Litigation (Campaign for Fiscal Equity, Inc., July 1998).

Last Updated, March 2011