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Cutting the fat in Montgomery: Riley leads as the state tightens its fiscal belt

By By KIM N. PRICE
BNI News Service
Gov. Bob Riley sat at the head of a long, mahogany table in the middle of his state Capitol office, periodically digging into a container of sunflower seeds. He pulled out one and crushed it between his teeth.
A small trashcan was placed next to his high-back chair. Your eyes followed the sunflower shell as it is tossed into the trashcan and you catch a glimpse of his neatly polished black boots as your glance returns northward.
With his shirt sleeves rolled slightly up his arms, he gazed down the long table at a group of Alabama editors, propped his elbow on the corner of the table and straight-forwardly declared: "Fellows, you cannot believe how bad it is."
It was with those words that Riley began telling the story of runaway governmental spending that has bootstrapped the state financially and placed Alabama in one of the most severe economic crises since the Great Depression.
Sitting around the table were Drayton Nabers, the former chief executive of a billion-dollar insurance company, whom Riley convinced to join his team as Finance Director to help put out the fires and find ways to fix the problem. Also there were Toby Roth, his chief of staff and David Azbell, Riley's press secretary.
No one spoke until the governor had laid out his plans to make immediate and drastic cuts, while maintaining necessary state services. In the end, the governor said the cuts would help erase a portion of an anticipated $500 million shortfall in the coming fiscal year.
Shortly after taking the oath of office, Riley directed Nabers to find financial fat and cut it.
Nabers moved quickly and made a laundry list. He began implementing cuts that, to date, total about $127 million annually. With state tax collections showing a 5.6 percent increase, the combination comes out to about $220 million in revenue and savings.
Nabers began attacking the problems immediately.
A legal team was hired to end a Department of Transportation lawsuit that has cost the state about $500,000 per month in litigation costs. More than $200 million has been spent so far on the lawsuit.
Riley ordered all state departments to reduce personnel costs by at least 5 percent, saving about $75 million annually, and he froze pay raises. He banned "pass-through-pork" projects – the process of hiding money within state agency budgets only to be later handed out by lawmakers as political favors – which will save about $1 million annually.
He cut the money state employees who travel can spend each day, a move that should save $6.1 million annually, and he revoked all state cars permanently assigned to government employees, saving about $7 million a year. He cut all but essential out-of-state travel.
The moratorium Riley placed on merit raises for state employees will save some $25.6 million annually.
Riley said the state must operate like a business.
Riley said cuts would get down to the basics too, for items such as pens and pencils, and copy paper. That's why he hired a professional state purchasing director, who he said can save some $11.7 million in purchasing costs annually.
Riley cut his own staff by 30 percent and payroll costs by 20 percent, including his own salary. The total savings in the executive branch was expected to be $750,000 annually.
Even with all the cuts, Riley said he must have the Alabama Legislature's help to trim even further. A measure he hoped to be part of a package of bills on constitutional reform would give him line-item veto authority. That would allow him to make further cuts in spending.
That issue has been one every governor before him would like to have had, but lawmakers will tell you that the line item veto issue will be dead when it hits the floor of the Legislature. That's because legislators see control of the state's budgets as their basic function. Riley disagrees.
For more information on Gov. Bob Riley's plans for state government, visit www.governor.state.al.us.
(Editor's Note: This is the first story in a series addressing Alabama's fiscal crisis and how government officials are tightening the state's financial belt through massive and immediate agency cuts. The series will detail efforts to rewrite the state's 1901 Constitution and how officials hope to offset a $500 million shortfall in revenues.)