Alabama state budget (2009-2010)
Gov. Bob Riley hoped to get through the end of FY 2010, which ended on September 30, 2010, without making further budget cuts to education, although Paul Hubbert, executive secretary of the Alabama Education Association, said school officials were "not going to be shocked" if the governor cut an addition 2%. The governor started FY 2010 by announcing on September 29, 2009 a 7.5% cut from the budgeted $5.7 billion Education Trust Fund, reducing it to $5.3 billion. However, in light of federal stimulus money which would not be available, legislative fiscal officer Joyce Bigbee estimated a $600 million shortfall for 2011. Tax revenues were estimated to be equal to 2009 at $1.3 billion.
Gov. Riley announced on August 21, 2009 adjustments for Alabama’s second major budget, the $1.5 billion General Fund, because of declines in state revenue. Spending adjustments for many of the agencies funded by the General Fund were ordered to modify their standard allocations of 25% each quarter to 22% for the first to third quarters and 34% for the fourth quarter.
- See also: Alabama state budget
The Constitution of 1901 has numerous amendments addressing the call for a balanced budget. Amendment No. 26, ratified in 1993, calls for a proration of state funds when the revenues actually received are less than the obligations appropriated by the legislature and approved by the governor.
Alabama's fiscal year begins October 1 and ends September 30 of the following year. Each year the state's agencies submit budget requests along with expenditures, an estimated condition of funds and a planning summary. All agencies must submit their requests by December 1 to the governor. On December 8 the revenue projections for the following fiscal year are finalized. At the beginning of each regular legislative session, the governor submits a two-part budget proposal for lawmakers to consider.
The following is an example of a budget preparation calendar typical of the second and third years of a legislative quadrennium. During the first and fourth years, the legislature comes into session in March and January, respectively; therefore, time frames are somewhat different for those two years.
- August 31: Budget instructions and forms mailed
- October 15 - December 20: Executive budget hearings
- November 1: Budget requests due
- December 1: Preliminary budget information to governor
- December 8: Revenue projections finalized
- January 8 : Governor's budget recommendations finalized
- January 21-31: Appropriations bills prepared and printed
- February 4: Governor presents budgets to legislature
- February 4 - May 18: Regular Session of the legislature
- The FY 2010 Education Trust Fund totaled $5.7 billion (reduced to $5.3 billion by Gov. Riley in September 2009) compared to the FY 2009 budget of $5.8 billion.
- The FY 2010 General Fund budget totaled $1.5 billion compared to the FY 2009 budget of $1.9 billion.
- See also: Alabama government accounting principles
Created in 1947, The Department of Examiners of Public Accounts is responsible for auditing the books, accounts, and records of all state and county offices, officers, bureaus, boards, commissions, corporations, departments and agencies and reporting on expenditures, contracts or other audit findings found to be in violation of law.
The rules under which the Department operates are found in Title 41, Chapter 5 of the Code Of Alabama. The majority of audit work performed by the Department consists of traditional financial and compliance audits, including federal compliance. These audits focus on two areas: reliability and accuracy of financial statements; and compliance with laws, ordinances, regulations and other requirements. In addition, the Department performs "operational audits" and sunset reviews that go beyond the traditional audits and address economy, efficiency and effectiveness of operations. Such audits have been developed because the performance of governmental entities is not generally measured by profit and cannot therefore be determined through analysis of financial transactions alone. Operational audits and sunset reviews are not normally comprehensive, but focus on particular aspects of operations. The Department’s audit reports are published on its website.
The Institute for Truth in Accounting (IFTA) rated Alabama “tardy” in filing the state’s Comprehensive Annual Financial Report (CAFR) – the annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA did not consider Alabama’s CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis did not include significant liabilities for the pension plans and for other post employment benefits, such as health care. Alabama’s Comptroller's Office is responsible for filing the CAFR], which is published on its website.
- See also: Evaluation of Alabama state website
On February 11, 2009, Governor Bob Riley signed an Executive Order to create a state spending database. The order mandated that the site, to be operated by the state Department of Finance, be up by March 1, 2009. The site is now available to citizens].
Economic stimulus transparency
- Alabama was set to receive more than $282 million from H.R. 1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.
- The American Recovery and Reinvestment Plan of 2009 designated $787 billion to be spent throughout the nation. Of that $787 billion stimulus package, it was estimated that 69%, or over $541 billion, would be administered by state governments.
- Alabama was expected to receive an estimated $3 billion in federal funding.
Error in ARRP
On November 16 and 17, 2009, many errors were found in the $747 billion plan that showed the plan set aside money for districts that did not exist. According to Recovery.gov, the plan showed its funds would go to 884 Congressional Districts, though there are only 435.
The ARRP website created four phantom districts in Alabama.
- Businessweek "Alabama educators fear more budget cuts" Aug. 25, 2010
- Gov. Bob Riley, “Education Budget Will Begin New Fiscal Year in Proration,” Sept. 29, 2009
- Fox6 News, "Shortfall expected in 2011 State general fund budget," December 15, 2009
- Gov. Bob Riley, “General Fund Agencies Must Revise Spending Plans Due to Recession,” Aug. 21, 2009
- Institute for Truth in Accounting, Alabama
- Alabama Department of Finance, “The Budget Process”
- Alabama Trust Fund Comparison Sheet 2010
- Alabama General Fund Comparison Sheet 2010
- Alabama Department of Examiners of Public Accounts
- California State Treasurer, “Comparison of Other States’ General Obligation Bond Ratings”
- Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
- "Ala. governor signs order on state spending," February 11, 2009
- "Alabama's checkbook online," WSF, March 4, 2009
- Federal Fund Information for States “ARRA FMAP Extension & Education Jobs Fund Totals” Aug. 11, 2010
- National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
- $6.4 Billion Stimulus goes to Phantom Districts, Watchdog.org, November 17, 2009
- Stimulus Creates Jobs in Non-Existent Congressional Districts, Watchdog.org, November 16, 2009
- Alabama, Watchdog.org, November 17, 2009