The Tuscaloosa News
July 2, 2009

By Dana Beryle

Birmingham lawyer to run for state treasurer

MONTGOMERY | Birmingham lawyer Jeremy Sherer said Wednesday he plans to run for state treasurer on a platform to fix the troubled prepaid college tuition program.

Sherer, 30, said the state should honor existing Prepaid Affordable College Tuition plans, convert assets to self-directed 529 college tuition investment contracts and then dissolve PACT.

“I believe government can actually benefit the lives of the people, so long as it upholds the public’s trust,” said Sherer, a Democrat. He said he would make an official announcement about his candidacy Monday.

Sherer works in Birmingham, but he and his wife and their two children live in Oneonta. He ran unsuccessfully for a state House seat in Jefferson County three years ago.

State Treasurer Kay Ivey cannot seek a third term by law. Southside businessman Terry Bunn said he’s running in the Republican primary for state treasurer.

Among the state treasurer’s duties is the administration of PACT, the 20-year-old program in which tomorrow’s college tuition can be purchased at today’s prices. PACT assets are pooled and invested by a professional manager hired by the PACT board.

A 529 college tuition plan is somewhat similar, although it is administered by individuals.

Sherer said if he’s elected, he would seek legal authority to change the remaining PACT contracts to 529 plans and let investors handle their own accounts.

“A 529 program fund for higher education is an individual investment program, like a 401(k) that you have,” he said.

Sherer said the loss of half the value in PACT funds over the last year or so is a timely campaign issue.

Although PACT contracts issued since the mid-1990s do not actually promise tuition payments, Sherer says there’s an implied obligation by the state to honor the contracts.

He said he believes PACT is too damaged by negative publicity to continue as a viable program.

“If you need to continue PACT, you have to have more contributions, but I don’t believe you will ever restore the public confidence in it,” he said. “We should honor PACT and the commitment our state made, but PACT is almost certainly unsalvageable when it comes to the public trust.”

PACT then should be dissolved, he said.