Alabama Gov. Bob Riley (R) has announced hiring freeze (reducing state workers from 39,000 to 36,000); a ban on merit raises; travel curtailment; and a cut to spending in a targeted manner by 10 percent. Education, which faces a $795 million shortfall, will be cut across-the-board by 12.5%, partly offset to 9 percent by drawing down half of $437 million Education Rainy Day Fund. Alabama requires proration (across-the-board spending cuts) to access rainy day funds, and general proration has not yet been declared. In 2003, Alabama voters rejected Riley’s proposal to raise $1.2 billion per year by increasing property, income, corporate, and cigarette taxes and imposing an intangibles tax. More on Alabama here.
