Montgomery, AL – Declining state tax collections have forced Gov. Bob Riley to announce massive cuts in state spending. Public education is taking its biggest hit in 48 years and many state agencies looking at double-digit reductions.
Riley declared proration - or across-the-board spending cuts - of 12.5 percent for the $6.3 billion education. Riley said he would use half of the state's $437 million ``rainy day'' fund to ease the cuts and make the effective proration rate 9 percent.
The cut in the fiscal 2009 education budget would be the biggest cut since education spending was prorated 14.1 percent in fiscal 1961. Since then, the biggest proration has been 6.5 percent in fiscal 1991.
State law does not allow a reduction in school salaries. That means the reductions will have to come out of non-salary expenditures.
The chairman of the state Senate education budget committee, Hank Sanders, says non-salary items could be cut 40 to 50 percent. He called it a sad day for school children statewide.
Riley did not declare proration of the state's $2 billion General Fund budget, which finances non-education programs. But he said he would use his authority as governor to reduce General Fund spending by 10 percent due.
Riley outlined a Deficit Prevention Plan that includes a hiring freeze that he hopes will reduce state employment by 3,000 jobs, or nearly 8 percent, through attrition over the next year. It also includes stopping all new vehicle purchases, limiting equipment purchases, and curtailing travel.
Riley said his plan for state government matches what Alabama families are doing - figuring out how to get by with less during tough times.
Riley said he did not declare proration of the General Fund budget because that would require across-the-board cuts, and some programs, such as Medicaid and prisons, can't be cut that. But he said there are others that can be cut more than 10 percent.
Riley says the numbers announced Monday are subject to change later. He is watching to see how the state's tax collections hold up during the Christmas shopping season and whether Congress passes an economic stimulus package to help the states.
(Copyright 2008 by The Associated Press. All Rights Reserved.)