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Republicans charge Knowles understates $116 million in costs

Posted: Friday, January 18, 2002

JUNEAU (AP) -- State spending could rise by as much as $296 million next year under proposals from Gov. Tony Knowles, the Legislature's chief budget analyst said Thursday.

Knowles understates $13 million and excludes another $103 million in uncertain Medicaid funds and anti-terrorism measures, said David Teal, director of the Legislative Finance Division.

Teal testified before a Senate Finance Committee studying Knowles fiscal 2003 budget request. Knowles unveiled the plan in December and called it a $180 million increase over the previous year.

But leaders in the Republican-controlled Legislature say the figure is more like $300 million and have pledged to make cuts.

Senate Finance Co-Chair Dave Donley accused Knowles of attempting to hide increases in state spending while lawmakers look for ways to shave the budget.

''Every year he's been here he's understated the true increase that he proposes. By the time we get his budget and do the real analysis it's much more,'' Donley said.

About half of the increase comes from Health and Social Services, said a Legislative Finance report released Thursday. But officials are counting on the federal government to approve $56 million in Medicaid funds, which is far from certain, Teal said.

The administration understated $10.8 million in state Medicaid spending, $1 million in Health and Social Service grants and claims and $1.2 million in longevity bonuses, Teal said.

It also lists $47 million in anti-terrorism spending under a separate request that does not affect the fiscal 2003 budget.

Knowles acknowledged increases in the budget, said press secretary Bob King, who chided Donley for highlighting relatively minor costs that won't close a $1.1 billion deficit.

''All they seem to be doing is arguing about the numbers,'' King said. ''Where's their plan for getting out of the hole.''

Knowles rolled out a tax proposal during his final State of the State Address on Wednesday designed to raise $1.2 billion in three years and catch up with the state's growing deficit.

The governor favors imposing a statewide income tax, a $30 head tax on cruise ship passengers and a dime a drink hike in the alcohol tax.

That would generate $400 million in new revenue. The Legislature and the next administration would have to find the next $800 million.

Republican leaders in the Legislature acknowledge they don't have a plan to fix the deficit.

House Speaker Brian Porter, R-Anchorage said they continue talks with the state Senate to find a solution.



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