Governor Robert Bentley on Monday announced the State of Alabama has reached over a billion dollars in annual savings one year earlier than expected thanks to extensive efforts to reduce costs to state government and increase government efficiency.
“Alabamians elected us to make state government more efficient and live within our means without raising taxes or cutting essential services,” Governor Robert Bentley said. “State government was broke when Republicans entered office in 2011, but together with Legislative leaders, we took a serious look at how we could find savings in state government. Today, I’m honored to announce that we have found over $1 billion in annual savings that will allow us to be better stewards of taxpayer money and operate state government as efficiently and effectively as possible.”
The long-term savings effort contains a series of initiatives led by Governor Bentley. Many of these initiatives involved the dedicated work of Lieutenant Governor Kay Ivey, House Speaker Mike Hubbard and Senate President Pro Tem Del Marsh and were approved by the Alabama Legislature.
Based on fiscal notes and conservative estimates from the Alabama Department of Finance, the total reflects savings through the following initiatives:
Pension Reform Measures: $345.6 million (average annual savings)
Workforce Right-Sizing: $160.7 million (annual savings)
SEIB/PEEHIP Employer Premiums: $118.8 million (annual savings)
DROP Repeal: $58.5 million (annual savings)
Indigent Defense Reform: $15.3 million (annual saving)
Various Bond Refinancings: $20.4 million (average annual savings)
**Nearly $245.3 million total over the life of the bonds**
Agency Streamlining and Realignment: $49.5 million (annual savings)
Prescription Drug Exemption: $200 million (annual savings)
Contract Renegotiations: $28.8 million (annual savings)
Merit-Raise Freezes: $139.7 million (annual savings)
Total Savings: $1.137 Billion
Governor Bentley was joined by Legislative leadership Monday as he announced the historic success in the state’s effort to save over one billion taxpayer dollars.
“Today’s announcement is another high mark of this administration.” Lieutenant Governor Kay Ivey said. “To reach this milestone in three years is the result of strong leadership and commitment by Governor Bentley, Pro Tem Marsh, Speaker Hubbard, the Legislature, and state employees to create a more efficient and accountable government that maximizes every tax dollar collected and spent. Early on I was asked to chair the Commission on Improving State Government and I am pleased to be a part of these sustainable changes that were implemented to help reduce costs and improve operational efficiency. Streamlining state government will be one of the key legacies of this administration’s first term.”
“Under Republican majority leadership, Alabama lawmakers have put the state on a path to save taxpayers more than $1 billion,” House Speaker Mike Hubbard said. “When Republicans took over the Legislature for the first time in 136 years, we promised to make tough decisions and live within our means, just like every household in Alabama, and we’ve taken that vow seriously. I’m proud of our success to date, but we are continuing our efforts to streamline and right-size government without raising a single dime of taxes.”
“Unlike the reckless, out-of-control spending we see in the federal government, Alabama has set a strong example for how to cut spending and run a more efficient, cost-effective government,” Senate President Pro Tem Del Marsh said. “Thanks to Governor Bentley, Lt. Governor Ivey and Republicans in the Legislature, we have reduced government spending by $1 billion and given Alabamians the lean and cost effective government we promised them in 2010.”
The savings will benefit both the Education Trust Fund and the General Fund budgets. While Alabama still faces budget challenges, these savings will help the state avoid hundreds of millions of dollars in reductions to essential state agencies and services. Governor Bentley and legislative leaders are committed to continuing to build upon these efforts and make state government more efficient.