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(Julie Bennett/jbennett@al.com)

Tax revenues to support education in Alabama fell barely short of expectations during the fiscal year that ended Sept. 30, with an unexpected decline in corporate income taxes.

The total receipts of $6.1 billion to the Education Trust Fund were 0.4 percent more than the previous year.

The Legislative Fiscal Office had estimated 1.6 percent growth.

Still, the state ended the year with a balance of about $116 million in the ETF.

Under a state budgeting law called the Rolling Reserve Act, $60 million of the balance goes into a budget stabilization fund to be used in times of proration, while $56 million goes into an advancement and technology fund.

The state has now put $178 million into the stabilization fund in the last two years.

The Legislative Fiscal Office presented the numbers today to the House Ways and Means Education Committee, which started gathering information and planning for the next legislative session, which begins Feb. 7.

The committee also heard presentations on the Teachers' Retirement System, the Alabama Reading Initiative and the Alabama Ahead Act, which is a plan to upgrade technology in schools.

New state School Superintendent Michael Sentance spoke briefly to the committee. The committee also held a discussion on tax exemptions for nonprofit organizations.

Rep. Bill Poole, R-Tuscaloosa, the committee chairman, said it was important to review how the last fiscal year ended and begin to consider some of the major issues lawmakers expect to face next year.

Income taxes and sales taxes are the biggest sources of money for the ETF.

Revenues from personal income taxes and sales taxes both increased during the fiscal year, signs of economic growth, Poole said.

Corporate income taxes, a much smaller component of the budget than personal income taxes, were expected to decrease because of some one-time payments made during the previous year. But corporate income tax revenues fell off about $60 million more than expected.

Poole said the downturn in revenue came in the final months of the fiscal year and was experienced in other states.

"It's something we need to determine what the root cause is," Poole said. "Certainly at this point we're just investigating, trying to understand it."

"We saw growth in sales taxes, which is a very positive economic indicator. We saw growth in the (individual) income tax revenues. So those are positives. But we need to understand what happened with the corporate income taxes and assess that as we do at the turn of every fiscal year."