Governor Bentley Signs Responsible Budgeting and Spending Act into Law

Press Release

Governor Robert Bentley today signed into law the first bill passed in the 2011 Legislative Regular Session at a bill signing ceremony at the State Capitol. The Responsible Budgeting and Spending Act, sponsored by Representative Greg Canfield, revises the budgeting process for the Education Trust Fund by allowing a "rolling reserve" process to make the Education Trust Fund resistant to proration.

"In passing this bill, the Legislature took a big step in working to make sure Alabama always budgets responsibly, Governor Bentley said. "By using a more sustainable budgeting process, proration in our Education budget will soon be a thing of the past. The bill which I signed into law today provides sustainable growth and spending for the Education Trust Fund."

The new law specifically will:

* Provide a ceiling for appropriations that is based on sustainable 15-year average annual growth rate. This ceiling will be raised in periods of healthy revenue growth and 40 percent of any revenues above the historical growth rate can be appropriated into the budget.
* Service the debt owed to the Constitutional Rainy Day Fund as a first priority when revenues exceed the spending cap.
* Create a planned system of savings through the Budget Stabilization Fund. These reserves can only be used when actual revenues fall below expectations and can only be used for purposes of maintaining spending at a level no less than the previous year or to prevent proration.
* Provide for a Capital Fund for education spending. This fund will be used for school construction and maintenance, purchase of equipment and technology resources, or service debt incurred to fund these purposes.

Governor Bentley commended the bill's sponsors Representative Greg Canfield and Senator Trip Pittman for their leadership in the passage of the bill. Governor Bentley also thanked Speaker Mike Hubbard and Senate President Del Marsh for the House and Senate's efficiency in passing the bill within the first six days of the 2011 Legislative Session.

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