Alabama's tuition plan turns to non-politicians

MONTGOMERY, Ala. - The board that oversees Alabama's Prepaid Affordable College Tuition plan is switching from politicians to non-politicians to try to negotiate a solution to the program's $346 million deficit.

The board decided Wednesday that three board members who aren't running for political office will work with the Legislature and universities to seek a solution. The board members are Mobile attorney Russell Buffkin, Summit America chief executive Daniel Hughes of Montgomery, and Andalusia Districting vice president Ricky Jones of Andalusia.

The board took a different approach during the last legislative session when the negotiations were handled by three politicians on the panel. They were gubernatorial candidates Bradley Byrne and Kay Ivey and Lt. Gov. Jim Folsom Jr. The three were unsuccessful in securing a financial solution.

"As a board, we felt like since it was an election year and so many people are running for office, PACT would be best served to have non-politicians negotiate with universities and the Legislature," Jones said.

Ivey, the state treasurer and the board's chairwoman, supported the move, as did Folsom.

"Partisan politics is not going to be a part of this," Ivey said.

The meeting attracted about 150 members of Save Alabama PACT, a group of families with youngsters enrolled in the program. Co-founder Patti Lambert of Decatur said she had hoped the board would give parents assurances that it would pay tuition beyond the spring 2010 semester, but it didn't.

Alabama's PACT program allowed parents or grandparents to pay a fixed amount when a child was small and be assured of four years of college tuition upon graduation from high school. The board invested the money - mostly in the stock market - to earn the money to pay tuition.

That worked from the program's inception in 1990 until the recession caused the value of its investments to plunge and universities started raising tuition faster than the board had anticipated.

Alabama is not alone. Seventeen other states have similar programs, and 15 of them are experiencing financial problems.

Going into Wednesday's meeting, Alabama's PACT board had 72 percent of its investments in stocks. To preserve the money it has left, it voted 7-3 to move most of its money to short-term fixed-income investments, such as bonds, and leave about 20 percent in stocks.

The move drew applause from members of Save Alabama PACT.

Former state Sen. Gerald Dial of Lineville watched the board meeting because he was one of the legislators who voted to create the program in 1990. "When I voted for it, I thought it was guaranteed," he said.

Dial, now a trustee of Troy University, said finding a solution won't be easy because legislators are dealing with declining state tax collections and universities are seeing their state appropriations cover less of their total costs.