PRORATION
SUPREME COURT REVERSES PRORATION POLICY.
ALL AGENCIES IN EDUCATIONAL TRUST FUND TO BE CUT EQUALLY. UPDATED
PRORATION INFORMATION WILL BE POSTED LATER THIS WEEK.
Proration
Information Last Updated: 07/03/2001
MEMORANDUM
TO: ASCA Grantees
FROM: Al Head, Executive Director
DATE: February 13, 2001
SUBJECT: 2000-2001 Budget Proration
As I am sure all of you are aware, last week the Governor declared
6.2% proration on the Education Trust Fund Budget for this fiscal
year. The impact of this cut to the Council's budget was over
$297,500. Salaries and fringe benefits for agency employees are
exempted from being prorated.
Because of the salary exemption and the fact that numerous grants
have already been closed out for the year, the percentage decrease
will come from other areas of administration, existing grants and
future funding. With this in mind, all grants you have received from
the Council for this fiscal year will be cut by 7%.
We regret this action is necessary and hope it does not
jeopardize your on-going or planned activities. If you have
questions, please feel free to call me or one of our program
managers at 334-242-4076.
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What
is proration?
Proration is the
process of cutting programs when revenues fall short of expectations.
Approximately 80% of the Council's funds are provided by the Alabama
Educational Trust Fund (ETF).
Because of a downturn in tax collections and other budgetary problems
with the ETF, the Governor declared a 6.2%
proration of the ETF budget to avoid a deficit. Deficit budgets are
unconstitutional in Alabama. Salaries and benefits are exempt from
proration. Certain other fixed costs, such as rent, utilities and
insurance, while subject to the proration, in actuality cannot be
reduced. According to the Mobile Register, " ... 85 percent of
the budget is tied up in salaries and benefits...Indebtedness,
insurance, gas, diesel fuel and utilities all are off limits as well,
leaving only about 10 percent open for cuts." Since the proration
is based on the annual budget and with only seven months left in the
current state fiscal year, various estimates have placed the actual
reduction of departmental budgets at between 9.3 and 12% or more for
the remainder of the year.
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What does it mean
for your grant?
In general, all FY2001
grants will be reduced by 12%. The following grants are not included in
the reduction:
- Fellowships
- Folk Art
Apprenticeship grants
- Technical Assistance
grants to individuals and organizations that are $1,000 or less
- Grants that had been
closed (final reports submitted and final checks processed) before
proration was announced.
Note: 2001 grants
awarded at the September 2000 and December 2000 Council Meetings
were awarded and announced at their approved amount. Your contract
award amount will be reduced by 12%. 2001 Grants awarded at the
March 2001 Council Meeting were reduced by 7% prior to announcing
your award. Those grants will be reduced by an additional 5%. Grants
awarded at the June 2001 Council Meeting will be reduced by 12%
before awards are announced. For organizations receiving quarterly payments, you
should anticipate that your final quarterly check will be reduced by
the full amount of the final proration.
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When will we receive
final payment for our grant?
If your grant is subject to proration (see above), we were
not able to process your final payment until a final proration percentage
was announced. We began processing final payments on June 5.
It is important to remember
that the proration is based on your total grant amount not on the
balance owed.
Example of 12% proration: If you received a $5,000 grant
and have already received payment for the first half or $2,500, your
final payment will be for $1,900 ($2,500 final payment - $600
proration = $1,900)
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Could current grant
proration be greater than 12%?
Yes. Under various plans being considered by the Courts, there
is a slight possibility that the amount of proration could be
greater than 12%; however, that is not anticipated at this time.
What does it mean
for future grants?
Grants awarded at the June, 2001
Council Meeting (for applications submitted at the March 1 deadline)
will be prorated 12% before being announced.
If you have any
questions about your grant, please contact a Program Manager.
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Other
State Government Sites
Live
Audio Broadcasts from the State Senate
(The State Senate is not currently in session)
Alabama Legislature
Site contains a variety of information about the
Alabama Legislature including pages for each
Member of the House and Senate and current bills.
A zip code look-up feature enables you to find
the names of your Representatives and Senators.
Governor
Siegelman
Web site for the Governor and First Lady
AlaWeb
Site contains search and index of Alabama State web sites.
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Press
Coverage
For more information on
the proration of the Educational Trust Fund and how it is affecting
various communities around the state, visit
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Updated
06/05/2001
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