CULLMAN — By Patrick McCreless

STAFF WRITER

Several years ago, Tom Migus of Cullman bought seven prepaid college tuition program contracts from the state to ensure his children and grandchildren received a college education. With the program now in financial trouble, that education soon may not be available.

Migus is unhappy and he is not alone.

“I told Sen. (Zeb) Little to get up and do something,” Migus said.

Migus was one of 65 local citizens who attended a community meeting concerning Alabama’s ailing Prepaid Affordable College Tuition (PACT) program Thursday at the Cullman County Courthouse. The meeting, hosted by the Save Alabama PACT organization, featured several speakers including local legislators Little and Rep. James Fields, as well as Alabama treasurer candidates George Wallace, Jr., Jeremy Sherer and Charles Grimsley.

“We have got a fight on our hands,” Little said during the meeting. “I’ll do everything in my power to help you solve this problem. But there will be organized opposition. We’re going to have a tough, tough legislative fight.”

The PACT program is a college savings program administered by the state treasurer’s office. PACT is based on the concept that citizens can pay today for tomorrow’s tuition.

For about 20 years, parents and others have bought contracts in expectation that PACT in future years would pay the college tuition and fees of covered children. However, tuition has skyrocketed, which has increased the PACT program’s obligations. Also, the recent stock market slump has slashed the value of its trust fund.

According to state statistics, there are 456 PACT contracts between Cullman County residents and the state. The city of Cullman has the most with 313, followed by Hanceville with 46. There are approximately 48,000 total citizens in the state with contracts.

During the meeting, the three treasurer candidates offered their solutions for the program’s financial problems.

“This is a complicated problem and it will require a complicated solution,” Sherer said.

Sherer said for the short-term solution, the administration costs for the PACT program should be cut. He said $60 million is reserved for the PACT program each year and 10 percent of that goes just to administration costs.

“The treasurer can cut that,” Sherer said.

Also for the short-term, Sherer told those in the audience that they and everyone with a stake in the program should contact their legislators and tell them to extend PACT during the next legislative session, which begins in January.

“It will make a difference ... 48,000 votes could have flipped any election last year,” he said.

For another short-term solution, Sherer said more money could be obtained through the state’s unclaimed property fund, which is managed by the treasurer. The $400 million fund is composed of money abandoned or lost by citizens.

“It’s an apolitical source of money and could avoid opposition,” he said.

For a long-term solution, Sherer said another larger, more stable source of revenue is needed and suggested the state start regulating and taxing gambling.

“The state should tax the gaming we have here already and put that into the education trust fund,” he said.

Wallace, who was state treasurer in 1990 and worked to establish the PACT program at that time, said one solution would be to lower the cost of tuition to universities.

“Tuition increases have outpaced inflation,” Wallace said. “We need to work with post-secondary institutions ... I think they can tighten their belts.”

Grimsley agreed with Wallace about tuition.

“I’m not talking about a freeze on tuition ... I’m talking about an inflation adjustment,” Grimsley said. “I believe we can design it (PACT) after Florida’s program. In Florida, tuition is set by the legislature, in Alabama, it’s set by the universities themselves.”

Shelby Ledyard of Cullman, who attended the meeting and owns two contracts for her grandchildren, said she liked what she heard from the speakers but is still worried.

“I’m scared ... I want them to have the same chance my children had,” Ledyard said.

Also during the meeting, representatives from the Save Alabama PACT organization encouraged everyone in attendance to do what they could to fight for the program, including writing and calling congressmen and writing editorials to newspapers.

For more information about PACT visit www.savealabamapact.com.

* Patrick McCreless can be reached by e-mail at patrickm@cullmantimes.com or by telephone at 734-2131 ext. 270.