Alabama’s General Fund Budget has been the greatest point of contention among state officials over the past six months. Facing an estimated General Fund shortfall of over $200 million, Gov. Robert Bentley rolled out a $541 million tax increase package. Legislators answered with numerous plans ranging from tax hikes and gambling expansions, to spending cuts and budget reforms.
After they were unable to build consensus, lawmakers fulfilled their constitutional duty to pass a balanced budget by relying entirely on cuts — 9 percent in most General Fund agencies and 5 percent in Medicaid, mental health and corrections. Gov. Bentley immediately vetoed the budget, which he called “unworkable,” setting up a likely Special Session later this summer.
But while most department heads pleaded for “level funding” and legislators rung their hands over having to actually make cuts, one state agency quietly slashed itself by one-third, serving as a model of fiscal responsibility at a time when the state’s conservative electorate is searching for leaders who practice what they preach.
The Alabama Public Service Commission doesn’t often find itself in news headlines. The agency’s primary function is regulating utility rates, but its jurisdiction also includes the regulation of telephone companies and some transportation companies. Its funded by fees collected from the industries it regulates and contributes its excess revenue to the state’s oft-troubled General Fund.
In 2010, when current PSC President Twinkle Cavanaugh first defeated Alabama’s last statewide-elected Democrat, the agency spent just under $10 million. Its on pace to spend less than $7 million this year, a 30-plus percent cut. The agency has also more than tripled its transfers to the General Fund from $3.8 million in 2009 to a projected $12.5 million during the coming fiscal year.
So how have they done it?
The PSC maintained 59 state vehicles in 2010. They’ve cut that number by more than half, down to 24. The agency also consolidated its office space from an eye-popping 67,000 square feet to a more manageable 42,000, cutting its annual lease from $1.1 million to just under $700,000 in the process. Cavanaugh’s office is now only one-third the size it was when she was first elected. But the most impressive cut may have been to staff, which has gone from a bloated 120 down to 75.
“We’ve very easily been able to shrink our budget because Commissioner Oden, Commissioner Beeker and myself are all on the same page when it comes to implementing our conservative, limited government philosophy,” Cavanaugh told Yellowhammer Thursday.
Some Republican legislators have resisted making cuts to state agencies because they are concerned with the public backlash. Cavanaugh says the PSC has proven those concerns to be unfounded.
“After we cut the budget at the Public Service Commission, I have not had a single private citizen say to me that they disagreed with our downsizing,” she explained. “In fact, it seems everywhere I go that people not only thank me but comment that they wish more cuts would be made in state government. There is no doubt that this is how taxpayers want their elected officials to steward their money.”
And even after all of the downsizing, Cavanaugh says they’re not done.
“I am committed to finding even more ways to cut government.”
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— Cliff Sims (@Cliff_Sims) June 9, 2015
