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State Treasurer wants Alabama Supreme Court to reconsider PACT ruling

Saturday, March 17, 2012

In a 6-1 decision Friday, the Alabama Supreme Court voided the settlement approved last year by a Montgomery judge over the state's Prepaid Affordable College Tuition plan.

The court issued the decision, which said the settlement is void because it conflicts with state law by calling for the program to pay tuition at 2010 levels and for the students' families to make up the difference.

The majority said lawmakers provided extra funding to the program in 2010 to make tuition payments fully funded and not violate the contract between the PACT board and contract holders.

State Treasurer Young Boozer issued the following statement:

"We are disappointed in the Court's ruling but we have respect for the Court and the judicial process. It appears the Court's decision was based on the belief that certain language in Act 2010-725 conclusively prohibits any type of compromise between the PACT Program and its participants. We do not believe the Legislature would have intended the language of Act 2010-725 to require such a result, especially under the circumstances now facing the program. We negotiated in good faith an agreement that would have provided benefits to all PACT beneficiaries. Today's ruling reinforces our determination to reach a solution that does just that. We remain confident that the settlement is in the best interests of all program participants, and we intend to ask the Court to reconsider granting approval to the settlement."

An attorney representing those who opposed the settlement praised the court's decision because it will provide for full tuition rather than partial tuition in the settlement.

But some fear the program's collapse because PACT lacks the money to pay full tuition, according to lawmakers. Rep. Craig Ford, D-Etowah, said: "The problem is now they have a cash flow problem. Therefore, the legislature has to come up with a way to put some cash into the program and fulfill the obligation of the contract. We've already paid $5 million in attorney fees. We're going to end up spending $200 million in attorney fees by the time this is all said and done if we don't come up with some money to solve this problem."

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Keywords: State Treasurer, Alabama Supreme Court, PACT ruling, college tuition, Montgomery,

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