February 10, 2012 Group Watch: Alabama Lawmakers Return
Lawmakers returned to work on Tuesday and received bad news: State agencies likely will face cuts in this year’s budget, and the cuts for next year will be much bigger, possibly forcing the release of prisoners and tearing holes in the state’s safety net of social services. The interim director of the Legislative Fiscal Office and the governor’s finance director told legislators that the state General Fund budget will likely fall $171 million short and that 9 percent across-the-board cuts will be needed to balance the current year’s budget. Likewise, revenues for next year’s budget are expected to be reduced by a half billion dollars, and agencies may have to look at cuts of 25 percent from this year’s budget. In the General Fund, half of the drop in revenue is due to the state not being able to replace $280 million in capital gains from state investments that were used in this year’s budget. Also contributing to the decline are smaller interest earnings on state deposits due to low interest rates.
