Aftershocks of financial crisis felt in Alabama

MONTGOMERY, Ala. (AP) - Alabama is taking a hit from the nation's financial crisis.

The crisis has lowered the value of state pension fund, reduced earnings in a plan to send students to college and eaten up more than $100 million of a state budget that pays for prisons, state troopers and Medicaid.

But state officials says the long-term financial outlook of these government operations is still sound.

The most obvious impact could be to the Retirement System of Alabama.

The RSA pension fund's values are down 8 percent to 12 percent because of the turmoil on Wall Street.

The pension funds total about $32 billion. But RSA chief David Bronner says the Alabama fund is in better shape than most because of a conservative and diversified investment plan.

RSA has invested in or owns golf courses across Alabama, newspapers and broadcast stations and even a large New York City office building.

Bronner says the different investments help in a huge way. He also says the losses this year follow the RSA's gains of about 17 percent the previous year.

(Copyright 2008 by The Associated Press. All Rights Reserved.) AP-NY-10-05-08 1239EDT