Alabama faces budget woes despite borrowing $437M

MONTGOMERY, AL (AP) - When the Alabama Legislature begins work on a new budget next week, state agencies could end up with less money for operations despite a voter-approved shift of $437 million over three years from a state savings account to the General Fund.

Senate budget committee Chairman Arthur Orr says it will be difficult to craft the new budget that will take effect Oct. 1.

Legislative leaders say state agencies are being asked to prepare operating plans with reductions of 5% to 10%, but they hope to give them the same amount of money they're getting this year. Even if they are funded at the same level, legislators say the agencies will have less to spend on operations because they're looking at higher costs for employees' health insurance and retirement.

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