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Tuesday, September 29, 2009

2010 education budget will start in proration

Gov. Bob Riley announced Tuesday that the education budget will begin the next fiscal year, which starts Thursday, in proration due to the continued downturn in the economy.
Riley set the across the board cuts in the education budget at 7.5 percent to offset the predicted shortfall.
"Given the state of the economy, we've anticipated for several months now that the education budget would enter fiscal year 2010 in proration, but it's still very unfortunate and I wish it wasn't necessary," Riley said. "Unlike the federal government, we cannot run deficits. Revenues are not at the level necessary to avoid spending cuts. With less revenue coming in and the escalating costs of employee health insurance, there’s no way to avoid it."
His office reported that the cost of health insurance for education workers continues to skyrocket, increasing 72 percent from 2003 to 2009 with a cost $1.135 billion. The state paid $660 million in 2003.
The budget for the 2010 fiscal year, with the 7.5 percent proration, will be about $5.3 billion. Education spending in Alabama was at $4.2 billion in 2003 and reached a high of $6.7 billion in 2008.
During the current fiscal year, Riley used hundreds of millions from a rainy day account to offset some of the decreases in revenue.

-- posted by Sebastian Kitchen

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Location: Montgomery, AL, United States

South Union Street is the blog of Montgomery Advertiser political reporters Markeshia Ricks and Sebastian Kitchen. Always check here for the latest on the Legislature, elections and other activities and players in Alabama.

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