Riley Borrows $124 Million From Fund to Ease Budget Cuts

By: AP
By: AP

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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