By Associated Press
Montgomery, AL – Gov. Bob Riley is preparing to announce Monday what spending cuts the state will have to make to balance the state education budget, which is under strain from tax collections falling below appropriations.
The Republican governor's staff said he will hold a 1:30 p.m. Monday news conference at the Capitol, where he is expected to announce the size of the budget reduction and how much money will be taken out of a state "rainy day" fund that could help ease any cuts.
Riley said recently he also was examining ways to curb spending by non-education agencies financed by the state General Fund budget. He could also make those announcements Monday.
State law prohibits deficit spending. When tax collections fall below appropriations, state law requires the governor to declare "proration" and announce spending cuts.
Through the first two months of fiscal 2009, a decline in sales tax collections and corporate income taxes caused the $6.3 billion state education budget to fall below necessary funding levels. The state was late the last two months in sending public schools part of their monthly allotments.
State Superintendent of Education Joe Morton forecast last week that proration could be 6.9 percent of the budget or more.
Alabama has $437 million in a "rainy day" fund that was approved by voters in November. That would be enough to balance the budget at 6.9 percent proration. Under law, Riley can take all or part of the money in the fund to ease any planned spending cuts.
For educators, the big question heading into Monday's announcement is whether Riley will use most of the fund to reduce any cuts or save part of it for the next budget year, which would mean bigger cuts this year.
Morton has urged Riley to make full use of the fund, but some legislative leaders have recommended Riley save some money for fiscal 2010, which could be an even leaner period.
The chairman of the Senate Education Budget Committee, Hank Sanders, D-Selma, said the 2010 education budget could be $500 million to $600 million smaller than this year's budget.
Riley said Friday his administration has been working with financial experts to determine the exact numbers to announce. He said his decisions could be subject to change later, depending on whether the state's economy continues to slow down or picks up later in the year.
"We are going to go ahead and make a determination, but there is nothing that is going to be chiseled in stone," he said.