Hunt Shelves Idea To Divert School Tax Revenues

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In the wake of criticism from state education leaders, Gov. Guy Hunt of Alabama has temporarily shelved a proposal to divert tax revenues for public schools to the state's ailing general fund.

Sketching out his plans for tax reform at a news conference last week, Mr. Hunt indicated he had not abandoned hope of "unearmarking" tax revenues, but would postpone his proposal until 1990.

Terry Abbott, the Governor's press secretary, said Mr. Hunt "did not feel, the way the legislature is constituted at this point, that it could pass." Legislators last year quashed a similar proposal to divert to the general fund a share of utility-tax revenues now reserved for schools.

In an address last month, Mr. Hunt had said "any true tax reform" would have to include a feature to remove designations of state revenue. One option, he suggested, would be to free 10 percent of state sales-tax receipts now set aside for public schools and colleges under state law.

That suggestion drew a sharp rebuke from Paul Hubbert, executive secretary of the Alabama Education Association, who claimed it would result in a loss of about $80 million in public-school funding.

Noting that the Governor has designated the current fiscal year as "the year of the child," Mr. Hubbert said adoption of the Governor's plan would turn 1989 into "the year of the rape of the child," an assessment that was shared by State Superintendent of Education Wayne Teague but prompted Mr. Abbott to demand an apology.

Reconstituted Study Panel

Mr. Hunt, who was unable to move an education-reform bill through the legislature last year, proposed no new education initiatives in his State of the State Message last week.

He noted, however, that he had reactivated an "Education Study Commission" that was established by the legislature in 1969 and disbanded a few years later.

Governor Hunt said he had directel10led the commission to study the state's education system and submit a "no-holds barred" report.

"Our aim is to rebuild public confidence in the schools of Alabama--and thereby generate the kind of financial support on the local level that may be needed to give our children a fighting chance," Mr. Hunt said.

The eight-member panel named by the Governor last month includes members of the business community, a senator, a local school-board member, and a former chairman of the state commission on higher education, but no professional educators.

Mr. Abbott said the panel would be "doing a number of things the Governor had proposed doing" in the reform plan that was defeated last year. That measure called for the creation of a state commission and local committees to assess the quality of schools.

State education leaders had opposed that plan, contending that the new panels would have undermined the authority of local school boards.

Although Mr. Teague said he supported the Governor's move to revive the 1969 commission, Mr. Hubbert last week called it "an effort to take the pressure off of having to introduce something new."

Governor Hunt "knew his reform bill was dead," Mr. Hubbert maintained. "When in doubt, do another study," he said of the education commission's revival.

Tax-Reform Plan

Mr. Hubbert also was unenthusiastic about the tax-reform measures outlined by the Governor last week.

Mr. Hunt proposed eliminating the state income tax on pensions and doubling the tax exemption for dependent children.

He offered several proposals to offset the revenue loss, such as improving the collection of taxes paid by electric utilities, enforcing an out-of-state sales tax on mail-order businesses, and amending the constitution to allow local governments to seek voter approval for property-tax increases of up to 20 mills, provided that half the revenue would be earmarked for schools.

But Mr. Hubbert said he doubted both the legality of the mail-order tax and the likelihood that voters would approve higher property taxes.

If those provisions fail to work, he said, "the result would be a net loss" for education funding.

Call for Unity

Despite such criticism, Governor Hunt used his annual address to offer an olive branch to his opponents, urging them to "lay aside the politics, the egos, and the rhetoric and work together in this time of danger to meet our education goals."

"I will work with any leader of education, regardless of our differences," Mr. Hunt said.

Mr. Hunt said the legislature's "number one priority" should be to pass both the education and general-fund budgets swiftly.

Action on both budgets ground to a halt during last year's regular session, and they were not approved until the legislature reconvened in a special session last fall. (See Education Week, May 18, 1988.)

"We can make history as the first administration and legislature to hear the demands of the people of Alabama for a quicker, more efficient budget process," Mr. Hunt said last week.

Vol. 08, Issue 21

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