Published October 17, 2009

“We have become, without meaning to, the third political party in the state of Alabama.”

So said Patti Lambert as she brought her grassroots movement, Save Alabama PACT, to Sand Mountain on Tuesday.

PACT is the Prepaid Affordable College Tuition program administered by state Treasurer Kay Ivey, who’s running for governor in 2010.

More than 60 PACT participants attended a meeting Tuesday night at Albertville First Baptist Church. The meeting is one of a series of sessions designed to spur the Legislature into action via the movement called Save Alabama PACT, started by Lambert, a Decatur resident.

She said the group’s Web site, www.savealabamapact.com, received 864,000 hits in September.

Lambert also said 1,100 PACT programs were purchased in the north Alabama region.

Lambert, who facilitated the Albertville meeting, has eight grandchildren and purchased six PACT programs with plans to buy two more until the economy nose-dived and placed the program’s future in doubt.

Sandy Tesney, of Guntersville, is heading up the movement in Marshall and Blount counties. She participated in the PACT program for her two children, who are 19 and 17 years old.

“We were very pleased with the turnout and the turnout of elected officials showing their full support of the PACT program,” Tesney said. “I’m much more optimistic.”

The Marshall County Legislative Delegation of Sen. Hinton Mitchem, Rep. Frank McDaniel and Rep. Jeff McLaughlin; gubernatorial candidate Rep. Robert Bentley; and three candidates for state treasurer, George Wallace Jr., Jeremy Sherer and Charley Grimsley, spoke to the audience.

The issues

The issues involve the PACT program and finding money to shore up its finances. A perfect economic storm involving the national recession and unexpected hikes in tuition costs and fees has created a swirl of uncertainty around a program indebted to thousands of students and future students.

The PACT Board placed a hold on all action earlier this year but said it would continue funding college tuition payments through the Spring 2010 semester.

The PACT Board hopes to find a financial solution in the legislative session starting in January because the program’s assets have plunged in value. It reportedly has only half the money needed to meet its future tuition obligations for the 48,000 participants.

The two-decades-old PACT program is a Section 529 college savings program based on a simple concept — pay today for tomorrow’s tuition. During the enrollment period of October through December, people can purchase a four-year contract or a one-year contract and pay for a child’s future college tuition.

Section 529 of the Internal Revenue Code of 1986 authorizes states to create two types of college savings programs – prepaid tuition plans and college savings plans. Alabama was the third state in the nation to implement a prepaid college tuition program when the PACT program began operating in March 1990.

The economic downturn, however, prompted a letter this year telling the reported 48,000 PACT participants the program had lost nearly half its value.

That letter sparked Lambert to organize Save Alabama PACT.

Few answers at meeting

People seeking concrete answers to their questions and guarantees they would receive returns on their PACT investments were disappointed at Tuesday’s meeting.

Carolyn Tetrault, of Arab, is paying for four PACT programs, and asked if she should “take her money and run.”

“No one can answer your question,” McLaughlin said. “The answer is, ‘It just depends.’ A lot of people have taken it out and of course that makes the burden greater for those who leave it in.”

Sandra Hanson, of Albertville, said her husband died four months ago.

“Two weeks before he died, I lied to him about the PACT program, because he was so worried about it,” Hanson said. “I told him they were going to fix it.”

Marshall County District Judge Tim Riley, speaking as a citizen, called legislative inaction regarding the issue “crazy.”

“You’re talking about an economic disaster,” Riley said, referring to the potential 48,000 lawsuits created if the state does not honor the PACT contracts. “It’s just exceedingly stupid for people not to try to get this done.”

The Marshall County Legislative Delegation and the three candidates for state treasurer all agreed the state is obligated to fulfill its end of the contract.

“I pledge to you to do everything I can to make sure this program is made whole,” said Mitchem, who supports Gov. Bob Riley calling a special session.

McDaniel said he is meeting to discuss plans to solve the program’s financial crisis next week.

“I think you’re going to find this program is protected,” he said.

Lambert urged supporters to attend the PACT Board meeting Nov. 18.