Gov. Robert Bentley and Republican lawmakers Monday said they had achieved $1.137 billion in current and projected state savings, much of it coming from state workforce cuts and changes to state employee benefits.
Speaking at a press conference in the state Capitol, Bentley said the state’s voters, who overwhelmingly voted Republicans into office in 2010, “gave us a clear mandate.”
“They wanted us to be good stewards of the money they sent to Montgomery, they wanted a government that lives within its means, and they wanted us to increase efficiency so that government is making the best use of the resources we have,” he said.
Lawmakers, he said, had “delivered on our goal of being good stewards of their hard-earned money.”
The governor acknowledged that some of the savings will not be seen for decades. The numbers provided by Bentley’s office include projections of $164.1 million average annual savings from pension changes for new state employee hires; the greater part of those savings are heavily backloaded into the future. The governor’s office also said a freeze on state employee merit raises, which will end at the start of 2014, had saved $139.7 million between 2011 and 2013, though it was unclear how much of that was state money. Many departments use federal funding and other grants to pay their workers.
Roughly two-thirds of the total savings came from decisions to pare back the state workforce and increase benefit costs for state employees. Since Bentley took office in January, 2011, the number of state employees has fallen over 11 percent, from 39,577 to about 35,000, mostly through attrition. For those who remain, lawmakers have voted to increase pension contributions from 5 percent to 7.5 percent, while insurance costs have also increased, due in part to fewer state employees paying premiums into the state’s health insurance system.
Mac McArthur, the executive director of the Alabama State Employees’ Association said those changes, along with inflation and the expiration of a two percent payroll tax cut last year, had eaten into state employees’ take-home pay.
“What you have seen out of these cuts is the state has lost a lot of valuable talent,” he said. “They have not replaced folks, and you have seen a greater load on state employees.”
The cuts to the state employee workforce have had other consequences. Alabama had 2,119 correctional officers in August, down 14 percent from 2006 and about 60 percent of the total authorized by the state, despite persistent overcrowding in the system. In March, Alabama Chief Justice Roy Moore ordered the state’s circuit clerk offices closed to the public on Wednesdays. Moore, never shy about criticizing the current level of funding for the court system, said with ongoing reductions to his workforce, clerks needed a days just to catch up with their paperwork.
House Minority Leader Craig Ford, D-Gadsden, said the cuts had hurt education and and the middle class.
“(Bentley) did it on the backs of educators and state employees and working families,” Ford said in a telephone interview.
The governor praised Alabama’s state employees, saying they had “had to work harder” and make sacrifices while continuing to do good work. Later in the press conference, the governor suggested measures to overhaul and streamline the state’s information technology system could lead to further workforce reductions.
The governor and Republican lawmakers have generally rejected proposals for new revenue for the state’s $1.7 billion General Fund, which pays for most noneducation funding. The General Fund gets its revenue from about three dozen sources, most of which show poor growth even in the best of times; in recent years, funding crises in the General Fund have been as predictable as the change of seasons. Bentley Monday did reiterate his support for federal legislation that would allow states to collect tax on Internet sales; the Legislature voted in 2012 to put 75 percent of any revenues from that tax in the General Fund. The governor said the $1.7 billion currently in that budget “was certainly not too much money.”
“But that’s what we have to work with,” he said. “We have to try to find savings in all our agencies so the money we have now will be adequate to fund all those agencies.”
Senate President Pro Tem Del Marsh, R-Anniston, said the savings found by the governor had allowed lawmakers to find money for other programs, such as the Alabama Reading Initiative and the Alabama Math, Science and Technology Initiative (AMSTI).
“We’re not asking anything of the government that families do not ask of themselves,” said House Speaker Mike Hubbard, R-Auburn. “With a household budget, you set a budget and you live within that budget. Families have to make tough decisions to live within their means.”
While merit raises will resume in January, state lawmakers have sounded skeptical about the possibility of cost-of-living adjustment (COLA) for state employees in the 2015 fiscal year, which begins Oct. 1. McArthur said he hoped they would change their minds.
“The leadership needs to say, ‘The most valuable asset we have in the General Fund are our employees,” he said. “‘We have got to do something to protect that asset. Keeping merit raises unfrozen and having a COLA is a way to address that.”
– posted by Brian Lyman