Does Steve Segrest get to say “I told you so”?
I know I’m coming in a little late to the PACT discussion, but I’ve been intrigued ever since we all learned that Alabama’s program is in serious trouble. The gist of the issue is that the state’s prepaid college program isn’t financially healthy at all. Some participants were surprised to learn that the program doesn’t guarantee tuition expenses. The big debate recently has been whether or not the government (state or federal) has a “moral obligation” to bailout the participants who are expected to take a hit in this state-run ponzi scheme. Brian’s sentiments are here.
When I first heard about the PACT troubles, I immediately thought of the 2006 election for State Treasurer. Didn’t follow that one? Kay Ivey was running for re-election (and won). Her Democratic challenger was little-known Steve Segrest. Segrest didn’t get much traction. I barely even covered his campaign on my blog, but years later I did remember his primary campaign issue:
State treasurer candidate Steve Segrest believes Alabama’s prepaid college tuition programs need a management change. The Montgomery Democrat told THE DAILY editorial board that Republican incumbent Kay Ivey is wrong if she believes the Prepaid Affordable College Tuition fund is in good shape financially and is one of the nation’s top prepaid tuition funds.
Now we can all say that Segrest didn’t have a clearly articulated solution, but he was also never given an opportunity. The press only mentioned his campaign issue as a segue for Kay Ivey’s “Everything is great!” claims. We can also say that we probably wouldn’t have agreed with his solution. From what I remember, he favored expanding the program he argued was financially unstable. I suppose that indicates he would want more government involvement in the program.
My only point with this is that the issue was brought up in 2006 and no one noticed. In fact, several even made fun of Steve Segrest and his quixotic campaign about the state’s PACT plan. We re-elected Kay Ivey with more than a 60% majority. Even if Segrest was undesirable for other reasons, we all completely ignored warnings of a looming PACT disaster until it recently hit us in the face.
Mr. Segrest can officially place a thumb in each ear, wiggle his fingers upward in the air, stick his tongue out, and say, “Nanny, nanny boo, boo.”
There is a tendency, I’m sure social researchers have a name for it, for people to be unwilling to listen to Chicken Littles when the subject involves something too good to be true. Look at the housing bubble. There were some who said it was not sustainable, but they were roundly ignored while the entire country engorged itself. Same thing here. People were buying “contracts” at what seemed like absurdly low prices because the deal really was too good to be true. But no one wanted to be the bearer of bad news and burst that little fantasy.
Also, Left in Alabama found meeting minutes where an actuary warned the PACT board in 2005 that the program wasn’t viable. The PACT board did not retain his services.
Personally, I’m glad the legislature did nothing on the matter this year. I don’t think there has been sufficient discussion about whether or not the program should be bailed out by tax payers.
BTW, I think the word is segue, not segway. Just learned that one myself.
What? I was talking about those little leaning-wheeled transportation things.
I would say he does get to say “I told you so”. The question is whether there is any feasible fix for the PACT program?
OP, I think any “feasible fix” will have to involve sacrifices from PACT participants. While the state did not officially back the program, officials certainly gave that impression. As you know, if you have a guaranteed contract with an entity that goes belly up then you have a guarantee for nothing. I don’t like the state retroactively pledging full faith and credit. However, I’d be amenable to splitting the baby and having the state offer some limited form of financial assistance to participants provided the participants cover the rest – maybe meet in the middle.