MONTGOMERY, AL (WSFA) - As expected, the state's General Fund officially began operating in proration today, though state agencies won't notice a difference because they've been operating at lower funding levels for months.
The declaration, made official today by Governor Bob Riley, is essentially a formality, as state agencies financed by the General Fund have been working with the Department of Finance to implement cost-saving measures to prepare for mandatory spending reductions in the fiscal year 2010 budget.
"Last August, we asked state agencies to revise their operating plans for the 2010 fiscal year and reduce their expenses to fit within our revenue projections," Acting Finance Director Bill Newton said. "Agencies have cooperated with our request and planned accordingly, making today's declaration of proration essentially a formality. State agencies won't notice any difference because they've been operating at lower spending levels since the fiscal year began."
Governor Riley thanked Mr. Newton for designing and executing an effective plan to handle the state's budget during the world-wide recession.
"State government is going to live within its means just as Alabama families and businesses do," Governor Riley said. "That's what the taxpayers expect and that's what they're getting today. Thanks to Bill Newton and his team at the Finance Department, our state agencies have been prepared for budget reductions from day one."
The effective rate of proration is 12 percent. The official declaration makes it possible for the Governor to draw from the state's Rainy Day fund should it become necessary during the remainder of the fiscal year.