State on road to billion dollar savings

Published 4:16 pm Thursday, July 19, 2012

Gov. Robert Bentley announced Thursday that the State of Alabama is on track to reach one billion dollars in annual savings thanks to extensive efforts to reduce costs and increase government efficiency.

Bentley was joined by legislative leadership as he unveiled the state’s Road to a Billion Dollars in Savings. The long-term savings effort contains a series of initiatives led by Bentley.  Many of these initiatives are currently in place and involved the dedicated work of Lt. Gov. Kay Ivey, House Speaker Mike Hubbard and Senate President Pro Tem Del Marsh and were approved by the Alabama Legislature. 

Moving forward, Bentley and legislative leaders are committed to building on their collaboration and identifying further savings to reach the billion-dollar savings goal by the end of the current term.

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“The bottom line is this: We made a promise to the voters to right-size Alabama government, and we’re living up to that promise,” Bentley said.  “During challenging financial times, taxpayers re-evaluate their own spending and make adjustments.  State government must do the same.  That’s the idea behind enacting these savings.  Through the efforts of my office and the support of our legislative leadership, I’m proud to announce we can achieve a billion dollars in annual savings for the taxpayers of Alabama. A billion dollars may sound like an aggressive goal, and it is.  But here’s why we’ll reach it: we’re already more than halfway there. In less than a year-and-a-half, we’ve already taken action to achieve well over half a billion dollars in annual savings. We’re working to identify even more savings, and we stand united with legislative leadership in reaching our goal of saving taxpayers a billion dollars a year.”

Based on fiscal notes and conservative estimates from the Alabama Department of Finance, Bentley and legislators have already taken action to realize nearly $675 million in current and projected savings.  The total reflects savings through the following initiatives:

  • 2011 Pension Reform Measures: $181.5 million    (annual savings)
  • 2012 Pension Reform Measures: $164.1 million    (average annual savings)
  • Workforce Right-Sizing: $181.3 million    (annual savings)
  • SEIB/PEEHIP Reform: $61.3 million    (average annual savings)
  • DROP Repeal: $58.5 million    (annual savings)
  • Indigent Defense Reform: $19.4 million    (annual savings)
  • Various Bond Refinancings: $8.3 million average per year    (Nearly $93 million total over the life of the bonds)
  • Total Current and Projected Savings: $674.4 million
  • Remaining Goal: $325.6 million

“When it comes to cutting costs in state government, it’s easy to talk the talk,” Marsh said. “But these results show our progress and prove our commitment to an efficient, accountable state government that maximizes every tax dollar sent to Montgomery. Speaker Hubbard, Lt. Gov. Ivey and I will continue working with Governor Bentley to identify and implement innovative solutions to cut costs and ensure taxpayers are getting the best possible return on their investment.”

“Under his leadership, Governor Bentley has moved state government in the right direction through his efforts to reduce costs and improve operational efficiencies,” Ivey said.  “Remarkably, he and the leadership of the Alabama Legislature are on track toward a billion dollars in savings for the hard-working taxpayers of Alabama.”

“It is our constant duty to ensure state government is operating as efficiently as possible and that taxpayers are getting their money’s worth,” Hubbard said.  “We must examine every dime of state spending, set priorities and, like every Alabama business and family, make the government live within its means.  I wish our mindset was shared by Washington.  We’re tightening our belts while President Obama and tax-and-spend liberals have piled on trillions in debt.  Alabamians can be proud of the conservative state leaders they’ve elected and the fiscally responsible course we are charting for this state.”

The savings are part of a long-term effort to right-size Alabama government.  The current and projected savings benefit both the Education Trust Fund and the General Fund budgets.  While Alabama still faces budget challenges, these savings have so far helped the state avoid hundreds of millions of dollars in reductions to essential state agencies and services.  Bentley and legislative leaders are committed to enacting further savings to build upon these efforts and make government more efficient.

“Saving a billion dollars is a goal that’s well within our reach,”  Bentley said.  “By working together, we’ll achieve our goal and deliver on our promise to the people of Alabama to be good stewards of their hard-earned money and to run this state as efficiently and effectively as possible.”