We Should All Have Questions About Ivey’s Mismanagement of Nearly Half a Billion Dollars
The Alabama Legislature created the Prepaid Affordable College Tuition or PACT plan in 1989. It allowed Alabama families to pay into the program with the expectation that their children would have all college tuition or fees covered. The program was extremely successful for 20 years.
Then, under Kay Ivey’s leadership as Alabama State Treasurer, her PACT managers made a series of poor financial choices and ended up with 70 percent of PACT assets invested in stocks. According to PACT critics, the stocks Ivey and her team put the most money behind were considered high risk and highly volatile. This concern soon proved to be true. In September of 2007, PACT had $899 MILLION in assets. Over the next 18 months, Kay Ivey and her team lost $468 MILLION, or $26 MILLION a month, and put the program on the brink of financial collapse.
Furthermore, Ivey’s mismanagement of nearly half a billion dollars meant the state could no longer guarantee PACT contracts would cover students’ tuition and fees. The move impacted almost 50,000 prospective students and families across all of Alabama.
What’s even more troubling is Ivey continued to push parents and grandparents to put their money in this failing program despite its staggering losses. In November of 2007, Ivey issued a press release telling Alabamians that PACT contracts are “a great gift idea!” The program was already on a downward spiral. Then, in January of 2009, amid hundreds of millions of dollars in losses, Kay Ivey encouraged parents in South Alabama to purchase PACT contracts.
Ultimately, Kay Ivey’s mismanagement forced the Alabama Legislature to step in and bail the program out by allocating $547.6 MILLION over 13 years, that is an average of $42 MILLION a year! Alabama taxpayers are still on the hook for this bailout until at least 2023! And you know what else? State leaders are still not sure that $547.6 MILLION is going to be enough to fix Kay’s mistakes.
Do you know what Kay did during all this? Dodged. That’s right. The same tactic she is pulling today by dodging debates, dodging questions from media, is nothing new for Kay. Kay Ivey dodged the questions of responsibility and failed leadership of the PACT program on her watch. Kay Ivey is hoping that she can continue this game of dodgeball right into a full term as governor. Let’s show Kay Ivey that the buck really does stop here. The games are over. No more dodging.