State surpasses $1 billion in savings

Published 7:12 pm Monday, December 23, 2013

Gov. Robert Bentley on Monday announced the State of Alabama has reached more than a billion dollars in annual savings one year earlier than expected thanks to extensive efforts to reduce costs to state government and increase government efficiency.

“Alabamians elected us to make state government more efficient and live within our means without raising taxes or cutting essential services,” Bentley said. “Today, I’m honored to announce that we have found over $1 billion in annual savings that will allow us to be better stewards of taxpayer money and operate state government as efficiently and effectively as possible.”

Based on fiscal notes and conservative estimates from the Alabama Department of Finance, the total reflects savings through the following initiatives:

• Pension Reform Measures: $345.6 million (average annual savings)

• Workforce Right-Sizing: $160.7 million (annual savings)

• SEIB/PEEHIP Employer Premiums: $118.8 million (annual savings)

• DROP Repeal: $58.5 million (annual savings)

• Indigent Defense Reform: $15.3 million (annual saving)

• Various Bond Refinancings: $20.4 million (average annual savings)

**Nearly $245.3 million total over the life of the bonds**

• Agency Streamlining and Realignment: $49.5 million (annual savings)

• Prescription Drug Exemption: $200 million (annual savings)

• Contract Renegotiations: $28.8 million (annual savings)

• Merit-Raise Freezes: $139.7 million (annual savings)

• Total Savings: $1.137 Billion

Bentley was joined by Legislative leadership Monday as he announced the historic success in the state’s effort to save over one billion taxpayer dollars.

The savings will benefit both the Education Trust Fund and the General Fund budgets. While Alabama still faces budget challenges, these savings will help the state avoid hundreds of millions of dollars in reductions to essential state agencies and services.