Last Thursday, Alabama’s House of Representatives approved a $5.93 billion Education Trust Fund (ETF) budget for the fiscal year of 2015 that will leave JSU scrambling to cover increased insurance costs.
The budget was the result of congressional compromise, with two options on the table: either give teachers a pay raise of two percent, or cover the increased healthcare costs of the Public Education Employee Health Insurance Program (PEEHIP).
The Republican supermajority in the House of Representatives chose to forego the raise in favor of paying for the healthcare costs, which amounted to about $200 million.
The compromise meant that the state would fund the increased cost of healthcare for education employees, but only in grades K-12. Two universities in Alabama participate in PEEHIP, JSU and Athens State. They will receive no additional funding to cover the increase in costs.
According to President Meehan, the legislature’s budget means “costs will be going up $66 per employee” at JSU. He said in an interview Tuesday that the university “really only has two steady sources of income,” the state appropriations provided through the ETF and tuition collected from students.
If state appropriations won’t cover increased PEEHIP costs, Meehan has said that JSU’s Board of Trustees will have to consider raising tuition. That would break the pledge not to increase tuition that Meehan gave to students at the SGA’s public forum on Higher Education Funding back in October of 2013.
However, President Meehan stressed that the proposed budget isn’t law—yet. “We don’t have a budget yet. We won’t until the Governor signs it,” he said. Bentley has until the 13th to do so; if he chooses not to, the budget will be pocket vetoed.
President Meehan may be hoping that is exactly what happens.
The budget awaits Governor Bentley’s signature. It’s possible that Bentley will veto the budget because it didn’t include the two percent pay raise he wants for teachers and support personnel.
Bentley promised the pay raise in his State of the State address in January. That same month, he proposed an ETF budget that covered both the pay raise and increased insurance costs.
However, lawmakers in the House of Representatives refused to pass the Governor’s budget, accusing Bentley of going around the ETF spending cap he signed into law in 2011. It’s interesting to note that the version of the ETF budget that passed the House of Representatives Thursday also violates the spending cap, although by a lesser amount.
Some state legislators called on JSU and Athens State to pass the increase in PEEHIP costs on to their employees, but that’s something President Meehan doesn’t want to see happen.
“We haven’t been able to give a raise to some employees,” he explained. Teachers received a two percent raise last year, but over the past five years, both they and support personnel—the people who maintain the campus grounds and make sure students have running water—have only received “about a five percent raise.
“We don’t want to pass those costs on to our employees because they would be a higher percentage of their salary. It would mean a significant cut in their take-home pay compared to other employees,” Meehan stated.
Whatever happens with Alabama’s ETF budget, President Meehan says that he and the Board of Trustees “will do our best to keep our promise not to increase tuition this fall.”