- Associated Press - Wednesday, March 5, 2014

MONTGOMERY, Ala. (AP) - Gov. Robert Bentley said Wednesday that he’ll veto the education budget unless lawmakers include a 2 percent pay raise for teachers and public education employees.

The governor said he won’t sign a budget that doesn’t include both the raise and full health insurance funding for education employees. Bentley made the statement via Twitter, and the stance was confirmed by his press office. The move could set up a veto showdown between the Republican governor and the Republican-controlled Alabama Legislature.

Bentley recommended a 2 percent cost-of-living raise for public school employees in his proposed budget. Instead, the Alabama Senate last week approved a one-time, 1 percent bonus.

Bentley defended his proposed budget as sound and balanced.

The chairman of the Senate Finance and Taxation-Education Committee, Republican Trip Pittman of Daphne, disagreed, saying the state can’t afford a raise the size that Bentley is seeking.

“The governor is being fiscally irresponsible right now,” Pittman said. “We have a statute that says how much money we can appropriate. We are in the middle of the great recession so we only have so much revenue.”

Despite the threat, the governor has a relatively weak veto in Alabama. Lawmakers could override him if a majority of elected senators and representatives agree.

House Ways and Means Education Chairman Bill Poole, R-Tuscaloosa, said it was premature to predict what final form the budget will take because the House was just beginning its work.

The House budget committee held a public hearing Wednesday on the proposed budget.

Leura Canary, chief legal counsel of the Retirement Systems of Alabama, asked committee members to increase the allocation for the Public Education Employees Health Insurance Plan. Canary said the program is dealing with increased costs from the Affordable Care Act and years of level funding.

“Any money that the legislature can give us toward that shortfall will help defray that cost that will have to be put on the backs of teachers and the members of PEEHIP,” Canary said.

Susan Kennedy, revenue and funding manager of the Alabama Education Association, told committee members that she was concerned that education employees could end up with a net pay cut, instead of a raise, because of increased insurance costs.

Bentley had proposed to spend more money on raises and insurance than state senators did by shuffling $92 million to get around a spending cap in the Education Trust Fund.

The Rolling Reserve Act, pushed by Republican legislators and signed into law by Bentley, sets an Education Trust Fund spending cap based on fund growth over the last 15 years.

The governor had proposed this year to send $92 million in sales taxes directly to schools. Since the money doesn’t appear in the Education Trust Fund, the spending cap is not violated. Bentley has said the money is needed to meet pressing state needs and would otherwise sit untouched in a large stabilization fund.

The Senate-passed bill, also skirted the funding cap, but by a lesser amount.

Pittman said the Senate’s version of the education budget spends less than the governor recommended, doesn’t exceed the spending cap by as much as the governor did, and includes $62 million to pay back on time the last of the money the state borrowed from the Alabama Trust Fund in 2009 to prop up public schools during the recession.

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