Riley borrows $124M from rainy day fund
Published 12:00 am Friday, August 20, 2010
MONTGOMERY(AP) — Gov. Bob Riley has borrowed $123.8 million from the state’s rainy day fund to keep non-education agencies of state government from being hit with a 20 percent budget cut.
Riley didn’t make a public announcement of his decision to borrow the money from the fund, which must be repaid within 10 years. But acting state Finance Director Bill Newton told The Birmingham News that General Fund agencies such as Medicaid and prisons were informed of the action in a memo Aug. 3.
Newton said Wednesday he didn’t know if any of the money would be carried over into the new fiscal year, which starts Oct. 1.
“That would be decided department by department,” he said. “The law allows a department to carry over any of its unexpended appropriations.”
Due to sluggish tax revenues, Riley put General Fund programs under a 12 percent budget cut, known as proration, on April 30. Newton said proration would have gone to 20 percent without the money from the rainy day fund, which is supported by offshore oil and gas royalties.
John Knight, D-Montgomery, chairman of the Government Appropriations Committee of the House.
The rainy day account was created by voters in 2008 and held about $180 million before Riley tapped into it, the first withdrawal from the fund.