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Right-Size Alabama: A Bentley Breakdown of $1.1 Billion in Spending Cuts

By Lee Hedgepeth
Alabama Political Reporter

Yesterday in the Capitol, Governor Robert Bentley held a press conference with the theme “Right-Size Alabama Government,” in which he, Lieutenant Governor Kay Ivey, House Speaker Mike Hubbard, and Senate Majority Leader Del Marsh laid claim to an annual $1.1 billion in savings for the state.

“Alabamians elected us to make state government more efficient and live within our means without raising taxes or cutting essential services,” Governor Robert Bentley said. “State government was broke when Republicans entered office in 2011, but together with Legislative leaders, we took a serious look at how we could find savings in state government. 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.”

Not all thought of the $1.1 billion as “savings,” however. Democratic House Minority Leader Craig Ford has a newly released a statement in which he expressed doubt about the amount of good the cuts will do for Alabama:

“Over the past three years, the Republican Super Majority in Montgomery has balanced the state budgets on the backs of Alabama’s families. Their claims to have “right-sized” government are just another way of saying they have terminated over 10,000 jobs – including more than 2,500 teachers and cut the pay for our educators, state employees and retirees… So maybe the Republicans in Montgomery think that 10,000 people losing their jobs and our state government nearly collapsing is something to brag about, but I do not!”

While most State Democrats echo those thoughts on the measures, Bentley and the GOP do not at all seem abashed of them. The Office of the Governor has provided a detailed account of the spending cuts which APR has analyzed.

The greatest amount of savings came from changes to the State Workers Pension System, totaling around $345 million a year. The changes, which were phased in during 2011-2012 involve increasing employee contribution to pension plans from 5% to 7.5%, with a jump from 6% to 8.5% for Fire, Law Enforcement and Corrections workers. The minimum retirement age was raised to 62 for State employees and teachers and to 56 for those in FLC, and a cap of 80% of salary was put on pension benefits.

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Another large portion was, as Representative Ford pointed out, cutting state employment, which the detailed report by the Office of the Governor refers to as “workforce right-sizing.” According to the report, though, not 10,000, but 4,509 jobs were cut, although that number did comprise 11.4% of those employed by the state. While a list of jobs severed was not included, it does note that 469 of these jobs, about 10%, were mental health workers. All employment “right-sizing” accounted for, the GOP cut around $160.7 million from the Alabama payrolls a year.

“Agency streamlining and realignment efforts” also came high on the savings list at around $50 million. $20.5 million of this was attained by closing mental health facilities in Tuscaloosa, Montgomery, and Mount Vernon. Also under this category was $400,000 saved by “authorizing pharmacies operating at county jails to accept and redistribute unused prescription medications under certain circumstances.” Finally, legislator pay was decreased by, on average, around 14%.

$15.3 million was listed in the area of “Indigent Defense Reform,” in which an Office of Indigent Services was created “to monitor and control excessive billing practices and eliminated reimbursement of overhead costs to attorneys.” Indigent Defense Services provide legal counsel for those who cannot otherwise afford it.

Other savings/cuts listed include $58.5 million from repealing a law that encouraged delayed retirement, $20.4 million from bond refinancing, $28.8 million from contract renegotiations (Mental health, corrections, DHR, Finance Dept.), and several million from freezing merit raises in state government (excludes AOC, the legislature, Post-Secondary, and Higher Education).

While this article includes major items, it is not a fully inclusive list. All information is available at governor.alabama.gov.

Lee Hedgepeth
Written By

DIG DEEPER

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