Budget with $100 million in cuts set to go before House Monday

Posted: Sunday, March 17, 2002

JUNEAU -- A House panel approved a stripped-down state budget for next year that sends a strong message to Gov. Tony Knowles: Don't forget to cut state spending before you leave office.

The Republican-led House Finance Committee voted along party lines Saturday to send the fiscal 2003 budget to the full House for debate before it goes to the Senate.

It includes more than $100 million in cuts from state services and a provision to force the Democrat governor to administer the cuts in his final months in office.

House Finance co-chair Eldon Mulder, R-Anchorage, said the plan ensures that Knowles lives under the hard-line budget being proposed in the House.

Democrats were quick to characterize it as a political sucker punch, calling it ''a new low'' in the stormy relations between the two parties.

''I think it's a very transparent, partisan attack on the current governor,'' said Rep. John Davies, D-Fairbanks, who voted against the amendment.

Knowles has not had a good relationship with Republican leaders during his two terms in office and Davies said the amendment illustrates the lack of trust that exists.

The committee added a provision in the budget that would give Knowles only half the funds earmarked for certain agencies during the final months of his last term.

In January when a new governor is in office, the remainder of the funds would become available.

Mulder has complained that the Knowles administration has disregarded the Legislature's direction on carrying out past programs.

He said Knowles officials have also indicated they may continue to run programs in the final months in office oblivious to the reduced budgets. Knowles leaves office in December and a new administration would then be left with even less money to run state government, Republicans fear.

''It's very clear by statements made by this administration that they want more money and they intend to spend more money,'' Mulder said.

Mulder acknowledges that the amendment is little more than a symbolic gesture since Knowles could access the funds after making a request before the state Legislative Budget and Audit Committee.

Bob King, Knowles' press secretary, complained that Republican leaders have not been straightforward with Alaskans about the cuts. The House Republicans budget slashes about $28 million from agencies without specifying which programs should be reduced.

''If they had the political courage, especially going into an election year, they should tell the Alaska public what they intend to do,'' King said.

The House budget approved on Saturday eliminates the state's Division of Subsistence and state food inspectors and would force the state to close 28 parks.

Transportation cuts would force the Alaska Marine Highway Service to shut down one ferry and lay up another for nine months. Winter road maintenance would also go unfunded in many areas, the administration said.

Finance Committee members gave the ferry system authority to raise $4 million through fees. But Annalee McConnell, director of the Office of Management and Budget, said it would be unable to raise that amount through increased fares.

Budget talks have been particularly contentious this year as lawmakers are forced to consider new taxes to close an anticipated billion-dollar budget shortfall.

Knowles' proposed fiscal 2003 budget included more than $179 million in increases, much of which the administration said is needed to pay for legislative initiatives or increased operating costs.

Mulder and other House leaders say they plan to insist on sharp cuts in state government as a prelude to a tax plan.

Alaska is expected to have a $1.1 billion budget shortfall fueled by declining oil revenues and a dwindling Constitutional Budget Reserve.

Both Knowles and a bipartisan caucus of lawmakers have been pushing House leaders to take up new revenue-raising measures this year.

Proposals to impose an income tax and sales tax have been introduced along with other targeted tax measures and a plan to split Permanent Fund earnings between dividends and state operations.

After closed-door meetings with key Democrats and Republicans pushing for new tax measures on Friday, House leaders agreed to leave a $400 million gap in the budget.

The amendment limits the amount that can be drawn from the state's budget reserve and is intended to emphasize to the Senate the need for new tax measures this year.

Senate leaders have voiced opposition for any new broad-based taxes and have instead insisted on a constitutional amendment to cap state spending.

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