Broad budget cut would pay state employee contracts

Posted: Monday, May 01, 2000

JUNEAU (AP) -- A broad unallocated budget cut would pay for wage and benefit increases for state employees under a bill approved by the House on Sunday.

The vote was a reversal from Saturday, when the House voted for to pay for the contracts without a budget cut. The agreements have become a pivotal issue as the Legislature moves toward adjournment.

The cut would lop 1.125 percent off the budgets of most state programs. Only a few 24-hour operations such as state prisons and the pioneers homes would be exempted, along with the court system and the University of Alaska.

House Finance Committee Co-Chairman Eldon Mulder said that would free up enough money to pay for the contracts without increasing the overall budget. The amendment containing the cut passed 21-19, with several Republicans joining minority Democrats in opposition.

''I love the end of the session. All of a sudden important questions boil down into somebody's cocktail napkin,'' said Rep. Tom Brice, D-Fairbanks. ''It's an easy answer to a very complex question and it's wrong.''

The Republican-controlled Legislature is reluctant to approve the contracts -- and increases for other state workers -- because they would require more than $18 million from the state's general fund. That runs counter to the GOP majority's desire to reduce general fund spending by $30 million.

Minority Democrats failed in an attempt to gut Mulder's amendment and take the money for the contracts from the Constitutional Budget Reserve.

''If you adopt this amendment, you have once again missed the goal of reducing $30 million,'' warned Mulder, R-Anchorage.

The exact impacts of the cuts were unclear. Aside from the programs specifically exempted from the cut, Mulder said, state aid to local school districts would be unaffected because it is governed by a formula written into state law.

But Pat Pourchot, Gov. Tony Knowles' Legislative director, said the formula only governs how the money is distributed to school districts, not how much is spent overall.

''You're taking $8 million out of schools in Alaska,'' accused Rep. Eric Croft, D-Anchorage.

Knowles attacked the cuts for trying to solve its internal problems with an unallocated budget cut in the Legislature's closing days.

''Cutting millions of dollars from public schools, troopers, child protection and other vital services, as this scheme directs, is simply unacceptable,'' said Knowles, a Democrat. ''This and past legislatures have consistently stated the irresponsibility of this approach.''

A few members of the Republican majority spoke against the unallocated cut as well, saying the employee contracts had not been considered as lawmakers worked on the budget this year.

''I say that the contracts are not part of the $30 million cut,'' said Rep. Allan Austerman, R-Kodiak. ''We should honor the contracts.''

The final bill passed 30-10 and now goes to the Republican-dominated Senate, which has indicated no inclination to approve the contract increases.

If the Legislature rejects the contracts and adjourns, it would likely provoke a special session called by Knowles, a strike, or both.

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