Senate Finance sends budget to the floor

Posted: Sunday, April 27, 2003

JUNEAU (AP) Senate Republicans on the Finance Committee crafted a budget Friday that would draw more from the state's Constitutional Budget Reserve than Gov. Frank Murkowski had asked, and provide more money for public schools and the University of Alaska.

The $2.3 billion budget will be on the floor of the Senate for debate on Monday, said Senate President Gene Therriault.

Senate Finance members crafted a measure that differs in several ways from the proposal submitted by Murkowski and from a spending plan crafted in the House.

Among them:

Education. Murkowski proposed funding the state's foundation formula at this year's level and making cuts to some grants, pupil transportation and debt reimbursement.

The House restored some of the grants to schools. The Senate rolled the grants into the state's foundation formula, raising spending by $159 per pupil.

Both the House and Senate rejected the governor's proposal to cut debt reimbursement to schools, and both would give school districts 70 percent of the money they spend on paying off school bonds.

University of Alaska. Murkowski proposed a $10.3 million increase in university spending. The House deleted that increase but the Senate added $9.5 million back.

Alyeska Central School. Murkowski proposed closing the state's correspondence school to save $1.2 million, which is the cost of its summer school program. The House supported ending that program but the Senate is poised keep the school open and end only the summer school program.

Longevity Bonus. Murkowski proposed ending the longevity bonus paid to eligible seniors to save more than $40 million. Both the House and Senate rejected that, but Senate budget leaders say it may be changed to limit participation to seniors who depend on the stipends that pay up to $250 per month.

Debt Service. Murkowski proposed using about $27 million from the Railbelt Energy Fund for state services, but the House did not go along with the change. The Senate budget uses the money for debt retirement.

Facing a chronic budget shortfall and a dwindling state reserve account, Murkowski had called on lawmakers to draw no more than $393 million from the state's reserve.

But Alaska's revenues are dependent on oil prices, and those have been falling.

A state Department of Revenue forecast earlier this month predicted oil prices would be about $1.32 per barrel lower than previously estimated. That would deepen the state's budget hole by an extra $71 million.

Therriault said after a meeting with legislative leaders earlier this week that the governor remains determined to sign a budget bill that draws no more than $393 million from the reserve. The governor holds line-item veto power to get rid of spending he doesn't want.

Murkowski had coupled his belt-tightening budget with a call for several new tax and fee increases aimed at raising about $113 million.

Sen. Lyman Hoffman, D-Bethel, said that's the most significant missing element of the budget. Neither the House or the Senate has approved any of the governor's many tax measures this session.

Therriault said revenue measures will begin to move through the legislative process to pay for the budget, and other cuts may still be made in the capital budget.

Once the Senate finishes its debate on the operating budget and approves its version, a conference committee of leaders from both houses will meet to hammer out the differences.

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