Riley making biggest cuts in education in 48 years

Published 2:22 pm Monday, December 15, 2008

Declining state tax collections forced Gov. Bob Riley to announce massive cuts in state spending Monday, with public education 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 budget. 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 budget would be the largest since education spending was prorated 14.1 percent in fiscal 1961. Since then, the biggest proration has been 6.5 percent in fiscal 1991.

Riley did not declare proration of the state’s $2 billion General Fund budget, which finances non-education programs, such as state troopers, Medicaid and prisons. But he said he would use his authority as governor to reduce General Fund spending by 10 percent.

Riley outlined a Deficit Prevention Plan that includes a hiring freeze 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.

“This Deficit Prevention Plan requires state government to do what Alabamians are having to do: figure out how to get by with less during tough times,” he said.

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 much. But some others, which Riley did not identify, can handle more than a 10 percent reduction, he said.

In the last year, Alabama’s unemployment rate has increased nearly 1 percentage point to 5.6 percent, and so far this fiscal year, tax collections have fallen below last year’s levels.

The Republican governor said Alabama is one of more than 40 states having trouble balancing their budgets this year due to the recession, but, he said, now is not the time to look at new taxes to balance the budgets — even on gambling halls.

“Gambling is not something I support. I don’t think that should be a way to fund state government,” he said.

Alabama’s financial situation is similar to when Riley entered office in 2003 and the state was facing a large budget deficit. Riley proposed $1.2 billion in new taxes, but Alabama voters overwhelmingly rejected that in a statewide referendum. Big budget cuts followed that vote.

State officials and school leaders looking for areas to cut are prohibited by state law from slicing salaries. That means other areas will have to take bigger cuts.

State Superintendent of Education Joe Morton said he expects public schools to delay the purchases of school buses, textbooks and library materials and to postpone filling vacancies.

Morton said he supported Riley declaring proration in the third month of the state’s fiscal year because if he had waited until later, the cuts could have been deeper.

Riley said all the cuts are subject to change, depending on how the state’s sales tax collections go for the Christmas shopping season and whether Congress passes an economic stimulus package to help states.

He said he anticipates draining the rest of the state’s rainy day fund for education later in the fiscal year — making a total of $437 million. If that is done, it could reduce the effective proration rate for education to about 5.5 percent, state Finance Director Jim Main said.

The Legislature passed Alabama’s current budgets in May, before the recession became official.

Asked if the budget cuts were a surprise, Riley said not based on financial data this fall. But he said, “If you had asked me this back in June or July, absolutely.”


Associated Press Writer Bob Johnson contributed to this report.