Kay's Answer: The best way for Montgomery to manage its budget is to do like the taxpayers who fund it. In my home, we budget for November based on our income in October. The State Legislature should do the same.
For example, the state's fiscal budget for 2010 should only spend as much as was collected in 2009. And, if the state happens to receive more revenue than it budgeted for in 2010, the difference could be used to pay down any outstanding debt or be set aside for a "rainy day fund" should a serious financial crisis hit us. Budgets assembled like this would be unlikely to suffer proration.
Another way to avoid proration would be to pass a constitutional amendment for a Tax and Expenditure Limitation (TEL). This idea, which has been proposed for several years by the Alabama Policy Institute, would limit the growth of state government to the rate of inflation, plus twice the rate of population growth. So, if inflation was 2 percent, and the state's population grew by half a percent, the state could budget for 3 percent more than the previous year.
How you would benefit:
The best way for schools or other public services to avoid proration is to appropriate next year's spending based on what was collected and spent the fiscal year before.