STATE HEADLINES:

ALABAMA BUDGET PROBLEMS: Alabama lawmakers are gearing up for the start of this year`s legislative session, but they say they will be haunted by the ghost of budgets past. They are predicting a shortfall of between $200-$300 million dollars; State House Speaker Seth Hammett calls the situation, "dire". Hammett also says Governor Riley hasn`t suggested any combination of cuts and new revenue to make up the gap. GAY MARRIGE: Also on the agenda, two non-budget issues that are sure to spark controversy. Leaders of the Democrat majority say that one of those will be passing a gay marriage amendment to the State Constituion, and the other, removing certain racist language from that same constitution. The removal effort failed last fall because opponents of the so-called amendment two painted it as a back-door effort to raise taxes for education. SCRUSHY TRIAL: Prosecution testimony continued in Birmingham yesterday, in the massive fraud case involving former Healthsouth CEO Richard Scrushy. Healthsouth`s first Chief Financial Officer testified yesterday, that Scrushy told him and a colleague to, (quote), "Fix the numbers" (unquote), when quarterly earnings were below analyst expectations in mid-1996. In a 58-count indictment, the government contends Scrushy conspired to inflate earnings by two point seven billion dollars from 1996 to 2002. Scrushy`s defense contends the fraud was carried out by a group of executives without his knowledge. Scrushy`s defense contends the fraud was carried out by a group of executives without his knowledge.