Budget committee chooses smaller university increase

Posted: Friday, April 28, 2000

JUNEAU (AP) -- A joint House-Senate committee approved the smaller of two proposed budget increases for the University of Alaska on Thursday.

The $8.5 million in added spending is roughly half of the $16.9 million the university had requested.

The amount was included in the Senate's version of the state's operating budget for the fiscal year that begins July 1.

A joint conference committee wrapped up work Thursday on a compromise between the House and Senate versions of the budget. Budget leaders among the Republican majority said the $2.1 billion bill meets their goal of cutting spending from the state's general fund by about $30 million compared to last year.

The committee's decision on the university was one of several aimed at holding down general fund spending. It seals the fate of a separate House bill that would have tapped the state's budget-balancing reserve for a $34 million increase over the next two years.

''I feel like I just lost $17 million,'' said Wendy Redman, a university vice president who lobbied lawmakers for the bigger increase. ''They didn't fund any of the fixed costs, and I've got no salaries.''

The Senate's increase does not cover a $5.1 million increase in university employee contracts and or about $3.2 million for other fixed cost increases such as inflation, utilities and repairs to facilities.

The House was able to muster the three-quarters majority required to tap the Constitutional Budget Reserve for the increase, but Senate Finance Committee Co-Chairman John Torgerson opposed the proposal and it never got a hearing in the Senate.

''It never had the votes in the Senate,'' said Torgerson, R-Kasilof.

That gave university supporters a choice between the lower Senate number or the zero increase included in the House's version of the budget.

House Finance Committee Co-Chairman Rep. Eldon Mulder, who backed the House plan, found himself in the awkward position of offering the motion that will likely doom his proposal.

''I think I'm developing laryngitis, Mr. Chairman,'' said Mulder, R-Anchorage.

About $6.5 million of the increase would come from a surplus in the money the state is sending to local school districts in the current fiscal year. The remaining $2 million would come from the proceeds of the state's student loan program.

The committee also adopted the Senate's proposal to send another $5.8 million of the school surplus to local school districts for programs designed to improve performance on the new high school exit exam.

Districts would get $43.75 per student in a special one-time allocation that bypasses a formula adjusting state education aid to account for the higher costs in rural areas.

Sen. Al Adams failed in an attempt to run the money through the formula.

''What I'm doing here is looking for fair and equitable treatment of all children in Alaska,'' said Adams, D-Kotzebue.

Republicans say the differing costs are already taken care of by the state's normal education aid.

''The reason for the increase and the way it's made is to provide an equal dollar amount for every student in Alaska,'' said Senate Finance Committee Co-Chairman Sean Parnell, R-Anchorage.

The committee also mostly erased the House's decision to eliminate money for the state's trade development offices in Japan and Korea. The money came from a surplus in department receipts for business licenses.

''The good news is that international trade got close to full funding,'' said Tom Lawson, director of administrative services for the Department of Community and Economic Development. ''The bad news is that the funding source is a one-time prospect.''

The budget debate this year was somewhat more amicable than in past years, in part because lawmakers used a variety of money shifts to replace general fund money with federal funds, so they could boost spending in areas such as foster care, subsidized adoption and child care.

''We were able to fund some of the increases with other sources of money,'' Parnell said. ''We didn't really cushion the cuts with them.''

Also, the process was aided by the passage of a bill that takes about $40 million of self-supporting programs out of the general fund portion of the budget. That allows those programs, mostly supported by user fees, to steer mostly clear of budget cuts.

Annalee McConnell, Gov. Tony Knowles' budget director, said she still has some concerns with the budget. The administration had called for more of the education surplus to be plowed back into education and children's programs.

Also, the budget does not pay for new contracts with state employee unions, an issue that will likely become the central issue as the Legislature moves toward adjournment.

McConnell pointed out that lawmakers were relying on one-time sources of money such as the education surplus to make their budget reductions, and said that may spell the end of several years of budget cutting.

''The Legislature realized that in most cases, the services can't be reduced further without real negative impacts,'' McConnell said.

The Republican majority is the last year of a five-year plan to reduce general fund spending by $250 million.

''I think this group truly picked priorities and funded priorities for the people of Alaska, and stayed within our fiscal constraints,'' said Torgerson.



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