Local aid, university not among cut targets

Posted: Wednesday, February 09, 2000

JUNEAU -- House budget leaders outlined $16 million in cuts to state departments Tuesday, but left two major areas -- the University of Alaska and state aid to local governments -- off the table for subcommittee hearings.

The Legislature's Republican majority plans to cut $30 million from the state budget for the fiscal year that begins July 1. Last month they threw out Gov. Tony Knowles' proposed increase of about $100 million, saying they would begin with the current year's budget.

The biggest cut outlined in the House Finance Committee's targets for its subcommittees is $15.7 million from the Department of Education and Early Development. The department is expected to save $19 million on basic school funding next year thanks to increases in federal aid and local tax revenue coupled with a drop in student enrollment.

Other cuts include $2.4 million from the Department of Community and Economic Development, $1.7 million from the Department of Law, and $1.5 million from the Department of Corrections.

Only the Department of Health and Social Services is slated for a significant increase -- $10 million. Knowles had asked for a $31 million increase.

Without the extra money, the department would be unable to keep up with automatic increases in areas such as Medicaid and foster care, said Annalee McConnell, Knowles' budget director.

''It's going to mean some very substantial impacts,'' McConnell said, adding that she couldn't be more specific until she sees exactly where the cuts will fall. The budget targets do not address specific programs, only department totals.

House Finance Committee Co-Chairman Gene Therriault said his subcommittee on the department would look not only at cutting budgets but also at altering programs that increase automatically.

''It's not enough money for all of the formula programs,'' Therriault, R-North Pole, said of his target. ''That will be a part of our discussions.''

Where the final $14 million in cuts would come from is unclear. Last year, lawmakers cut $16 million from two programs that funnel state aid to local governments. The remaining $32 million in those programs may be on the block this year, although local officials from around the state are pleading with lawmakers to leave the money alone.

Meanwhile, University of Alaska President Mark Hamilton was in town last week demanding a $16.9 million increase in a charismatic performance that won over many lawmakers.

Therriault said the amount of aid to local communities is usually decided by the majority caucuses, not a budget subcommittee. That amount is often a crucial part of a deal to end the Legislature's session.

''The decision this year was that the university pretty much fits into that category as well,'' Therriault said.

The situation could create a tension between supporters of the university and those who want to protect local governments from further cuts, although Therriault downplayed that possibility.

Wendy Redman, the university vice president who acts as a liaison to the Legislature, was happy to be out of the subcommittee, where attention tends to focus on cutting spending.

''There is enough interest in the university's budget that all of the members of the committee wanted to be involved in the decision,'' Redman said.

Kevin Ritchie, executive director of the Alaska Municipal League, also downplayed the possibility of conflict.

''It's not really a competition at all,'' said Ritchie, who represents local governments around the state.

''It's a question of what really has to be done to keep Alaska a good place to live.''

Minority Democrats shook their heads over the budget targets, which are part of the majority's response to the state's budget gap. The gap between spending and normal revenue is expected to grow to more than $700 million in the coming fiscal year.

''It's the usual sort of wheel of misfortune approach to budgeting,'' said Rep. John Davies, D-Fairbanks.



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