In his attempt to mend the half-billion dollar hole in the state's general fund, Gov. Bob Riley has lowered the ax on state agencies, slicing nearly $240 million from the general fund.

But what the Riley administration is calling sound business strategies, state officials are calling an attack on state employees and ultimately taxpayers.

&uot;I think the governor's budget cuts are very short-sided,&uot; said Mac McArthur, executive director of the Alabama State Employees' Association. &uot;I think they're unfair. I think there's a lack of commitment and lack of understanding on his part.&uot;

Since Riley began his tenure as governor, he has announced an indefinite 5 percent freeze on merit raises for state employees and has submitted a budget with 5 percent personnel cuts for each state agency coupled with a 18.85 percent across-the-board reduction for most state agencies. His plan also includes a reduction on travel per diem and a return of all state-assigned vehicles.

While McArthur is hoping the governor will reverse his cuts, Riley spokesman David Azbell said more are on the way.

&uot;Gov. Riley is aggressively looking every day for inefficiencies in government he can correct,&uot; Azbell said. &uot;That is the focus of this administration.&uot;

Azbell also pointed out that every state employee received an automatic 3 percent Legislature approved pay hike despite a bleak fiscal outlook. Without the cuts, Azbell said, state employees could have received up to an 8 percent pay increase.

&uot;You just don't stay in business doing that,&uot; Azbell said. &uot;The 3 percent is already above the inflation rate. I would call that sound budgeting.&uot;

McArthur said not only will agencies be forced to operate under depleted personnel and revenue, but eventually, offices taxpayers depend on, such as state trooper posts and license examiners will have to close.

&uot;It's horrible for state employees,&uot; he said. &uot;It's even worse for the taxpayers because they're losing the services these people provide.&uot;

McArthur said he has seen the affect the cuts have taken on employee morale and said some are choosing retirement over working under such a stringent budget.

&uot;Morale is at an all-time low,&uot; he said. &uot;I can't help but be extremely disappointed.&uot;

Riley's cuts will also be detrimental to the state's efforts at attracting more industry, according to McArthur. He said the cuts will hamper state services such as education and public safety, which prospective industries consider when choosing a home.

&uot;I think it will have a negative impact on us recruiting industry,&uot; he said. &uot;I would hope the governor has seen the fallacy in what he's done and start

reversing some of his decisions,&uot; he said. &uot;We've encouraged the governor to show courage, not cuts. He's made no attempt to make it better.&uot;