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Ala. Agencies Told To Curtail Spending

Montgomery, AL – Gov. Bob Riley's administration is warning most state agencies to curtail their spending plans for the new fiscal year starting Oct. 1 because state revenue is declining due to the recession.

State agencies normally get 25 percent of their state General Fund appropriation each quarter. But Riley's acting state finance director, Bill Newton, sent a letter to state agencies Friday saying they need to plan on getting 22 percent in each of the first three quarters. Then they will get 34 percent in the final quarter.

Newton says two state agencies - Medicaid and Corrections - will be exempt because they are not able to reduce spending further.

The cutbacks are less than the 10 percent reduction most agencies had to make for the current fiscal year.

(Copyright 2009 by The Associated Press. All Rights Reserved.)

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