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Financial Crisis Affecting Alabama

By Associated Press

Montgomery, AL – Alabama is taking a hit from the nation's financial crisis. The crisis has lowered the value of state pension fund, reduced earnings in a plan to send students to college and eaten up more than 100 million dollars of a state budget that pays for prisons, state troopers and Medicaid.

But state officials says the long-term financial outlook of these government operations is still sound. The most obvious impact could be to the Retirement System of Alabama.

The RSA pension fund's values are down 8 percent to 12 percent because of the turmoil on Wall Street. The pension funds total about 32 billion dollars.

But RSA chief David Bronner says the Alabama fund is in better shape than most because of a conservative and diversified investment plan.

RSA has invested in or owns golf courses across Alabama, newspapers and broadcast stations and even a large New York City office building.

Bronner says the different investments help in a huge way.

He also says the losses this year follow the RSA's gains of about 17 percent the previous year.

(Copyright 2008 by The Associated Press. All Rights Reserved.)

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