Proration Necessary To Balance State’s General Fund Budget

By  | March 16, 2012 | Filed under: News

MONTGOMERY – Governor Robert Bentley on Friday declared 10.6 percent proration on the state’s General Fund Budget for the remainder of fiscal year 2012, which ends September 30.

Alabama’s General Fund has been impacted by several major factors that make proration necessary.  The largest factors include tens of millions of dollars in state funding required for tornado recovery.  Also, stock market conditions during the fourth quarter of fiscal 2011 were among the worst in the last 60 years, directly affecting revenues to the General Fund.

“We have pursued every possible option in order to avoid proration; however, this step must be taken.” State Finance Director Dr. Marquita Davis said.  “While proration is difficult, it is necessary to balance the budget, which is constitutionally required in Alabama.”

Upon the declaration of proration, state agencies that are financed by the General Fund must reduce expenses through the current fiscal year.

“Just as families must reduce their spending when money is limited, government must also reduce its spending,” Governor Bentley said.  “We must live within our means, and we will make financial decisions that honor our commitment to taxpayers to keep a balanced budget.”

“Looking ahead, there are encouraging signs such as an unemployment rate that is now down to 7.8 percent.  Also, we have announced more than 17,000 new, future jobs.  Unfortunately, the General Fund Budget has no growth revenues, so it will take longer to respond to the economy improving,” Governor Bentley added.

 The proration declaration does not affect public school funding.

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