BCA submits cost-cutting ideas

Published 12:00 am Monday, December 29, 2003

The Business Council of Alabama recently suggested cuts for the state Legislature and submitted a list to Governor Bob Riley, some of which include the following:

€ Increasing the number of years of service for state employees and teachers to get full

retirement from 25 to 30 years, or requiring that an employee's years of service and the employee's age to add up to 85 before getting full retirement benefits.

€ Revising the state's Deferred Retirement Option Program, or DROP, to require a person to be 60 rather than 55 to enter, or simply prohibiting anyone else from enrolling in the program.

€ Requiring state workers and school employees to work at least 32 hours before qualifying for full health insurance and retirement benefits. Currently, school bus drivers and cafeteria workers are considered full-time employees for benefit purposes, no matter how many hours they work.

€ Requiring state employees and public educators to pay a greater share of the cost of their health insurance program, but provide a discount for employees in low-paying jobs.

€ Repealing a state law, enacted in 2000, that says teacher's pay in Alabama will be raised to the national average. BCA said Alabama should aim for the Southeastern average, which is lower than the national average.

€ Increasing the length of time a teacher may earn tenure from three to seven years.

€ Making state services more private.

Rather than purchasing state vehicles, leasing them.

€ Studying whether it would be more financially sound to turn over the operation of state- owned school buses and cafeterias to private enterprise.

"We want to reform efficiency in the governmental process prior to any discussion to revenue enhancement," William Canary, president and CEO of the BCA said. "We're (attempting to) apply a business environment to the government. At the same time, we are looking to ensure both state workers and teachers jobs."

Canary said the basis of a sound government is to protect the number of jobs for state employees.

The BCA's recommendations were "absurd and totally offensive," Executive Director of the Alabama State Employees Association Mac McArthur told the Associated Press.

Executive director of the Alabama Education Association Paul Hubbert expressed similar sentiments in regards to the BCA suggestions, and he said $60 million from the state's education budget was lost when the Legislature changed the business franchise tax after the US Supreme Court declared the old one unconstitutional.

"We don't want to see any layoffs or disrupter of the education process (for the workforce)," Canary said. "The opportunity to save is a starting point. A substantial amount, nearly $300 million (would be saved from the cuts)."

Canary added the state government should look to cut spending, not jobs, from government before looking to increase revenue - such as through taxes.

"Our goal everyday is to keep the businesses strong and keep people employed," he said.

"Alabama has a great resource in employees and teachers. The (budgets for the government) system may be broke, but not the people.

"I think cost-cutting needs to come first," he continued. "The taxpayers of Alabama need to believe the government is living within its means and making appropriate accommodations to require individuals to take a hard look at what they can afford. Its a parallel to what we do in business."

It is imperative for the workforce to be educated, and teachers' jobs need to stay, according to Canary.

"Economic development depends on an educated workforce," he said. "State employees

provide a critical element (in the force)."

"The governor has received (the BCA reports)," Riley's Deputy Press Secretary John

Matson said. "However, he has not had time to review them. He does appreciate the work the BCA has put into them."

Matson added the governor may have a public comment on the reports as early as next week.

"Trust must be rebuilt into (state) government, then the stakeholders can have an intelligent conversation about raising revenue," Canary said.

Following the defeat of Riley's tax proposal on Sept. 9, the governor publicly asked BCA to provide him with suggestions of cuts for the budget.

The Legislature will be back in session Feb. 3 to discuss the FY 2005 Budgets.

"The day after (the defeat of the tax referendum) the governor addressed the Board of Directors of the BCA and asked us to apply the business experience into the (state government) process prior to Feb. 3," said Canary.

Cannary added the suggestions were an ongoing work from Sept. 10 until Dec. 3, when a formal BCA board meeting was held to approve the suggestions before sending them to Riley.

"It was a well-researched effort," Canary said. "The suggestions came from 31 (BCA) members from all parts of the state, representing the business community - both large and small businesses."

If the governor and Legislature adopt cuts being considered by the state Department of Public Health, then some county health departments may close their doors, according to officials.

Agencies, such as the ADPH, are being asked by the Commission on Efficiency, Consolidation, and Funding, created by Riley to consider cuts up to 60 percent in their General Fund money. Approximately 17-30 county health departments may close and be consolidated into regional departments as a result to cuts, added ADPH officials.

The cuts may also include fewer vaccinations, elimination of medication programs for

hypertension and AIDS patients, layoffs for 450 employees, and a drop of 28,000 children from state funded health insurance.

The commission will present its recommendations to Riley by Dec. 31.

"We are not sure if the cuts will be implemented or not," Matson said. "There is no way of

knowing until we see (the commission's) reports."