Gov. Riley dips into Rainy Day Fund for $124M

MONTGOMERY, Ala. (AP) - Gov. Bob Riley has borrowed nearly $124 million from the state's rainy day fund to keep non-education agencies of state government from being hit with a 20 percent budget cut.

Riley didn't make a public announcement of his decision to borrow the money from the fund, which must be repaid within 10 years. But acting state Finance Director Bill Newton told The Birmingham News that General Fund agencies such as Medicaid and prisons were informed of the action in a memo Aug. 3.

Due to sluggish tax revenues, Riley put General Fund programs under a 12 percent budget cut on April 30. Newton said Wednesday the budget cut would have gone to 20 percent without the money from the rainy day fund, which is supported by offshore oil and gas royalties.

The rainy day account was created by voters in 2008.

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