State faces tough budget decisions

Published 12:35 am Saturday, February 12, 2011

Those in Alabama who’ve called for a reduction in federal spending and balanced budgets are about to get a grim dose of reality.

By law, the state must pass a balanced budget every year. So state officials project revenue and the legislature passes a budget based on those projections. But there doesn’t seem to be a requirement that those projections are realistic.

Take last year, for instance. Then-Gov. Riley sent over election-year budgets and the legislature passed them. Experts said then it wasn’t a realistic budget and proration would have to be declared.

Five months into the budget, experts are still saying “we don’t have the money” to fund these budgets. Everyone expects proration, but Gov. Bentley, like his predecessor who governed for the first three-and-half months of this budget, has been hesitant to make the declaration. Now, he’s said to be waiting on February receipts and will make the declaration in March.

This week, state finance officials reported that the state’s Education Trust Fund is going to be at least $126 million short of the $5.5 billion budgeted, and the General Fund is $150 million short this year.

The projections are more bleak for fiscal year 2012, which begins Oct. 1, 2011. Without the cushion of federal stimulus money, education will be $688 million short, and the general fund faces a $554.2 million deficit. That’s about one-one third of its funding. Half of what’s left would be needed to level fund Medicaid. that leaves relatively little with which to fund public safety, prisons, public health and mental health. Scratch at any of those areas and you come up with a population in Alabama that will be underserved in Fiscal 2012.

Nothing, state officials say, is off the table. There’s no way around employee cuts in the General Fund budget.

Gov. Bentley is tasked with presenting proposed budgets for next year to the legislature on their second meeting day, which is March 2. Those close to him say he’s looking not only at cuts, but also at ways to increase revenue.

Because we are Constitutionally-bound to have a balanced budget in Alabama, even our bleak situation isn’t as difficult as those in states that have both funding and debt problems.

But get ready: All of us are bound to feel the cuts that lie ahead.