As expected, Governor Bob Riley has declared proration in State education spending. He also announced a hiring freeze in non-education State agencies. The Governor said the revenue shortfall would have caused across-the-board cuts of 12.5%, but by taking $218 million, or half of the $437 million available in the State’s rainy day fund, he was able to reduce the cuts to 9%. Apparently, the second half of the rainy day fund will be distributed during the fiscal year.
The Governor also is using his authority under the State Budget Management Act to reduce spending by 10% in State agencies funded out of the general fund. This will reduce spending for these agencies by about $200 million in the current year. It means non-education agencies face a hiring freeze, a freeze on State merit pay raises, a halt to the purchase of new State vehicles and other cost-saving measures. None of this is good news for the people of Alabama.
Source: Birmingham News
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