Senate approves spending limit constitutional amendment

Posted: Sunday, May 06, 2001

JUNEAU (AP) -- The Senate voted Friday to place a constitutional amendment for a new spending limit before voters, even while acknowledging the measure needs refinement.

Senators voted 14-6 along party lines in favor of Senate Joint Resolution 23. If approved by voters, the constitutional amendment would create a new $3.1 billion cap on spending and tie future increases to no more than 50 percent of inflation and population increases.

Republicans say a spending limit is a key to a long-range fiscal plan.

''I can't imagine a successful plan that doesn't have this as a basic element,'' said Sen. Dave Donley, R-Anchorage, co-chairman of the Finance Committee and the measure's prime sponsor.

The other co-chairman, Sen. Pete Kelly, R-Fairbanks, acknowledged in committee deliberations Thursday that Donley's plan may need refinement. But he concluded the fix should come during deliberations in the state House.

''The House committee process has been so frighteningly slow this year I don't want us to be jamming this through at the last minute next year and not getting the kind of work it needs to have done on it,'' Kelly said.

He said he had faith that Donley would ''dog'' the bill and fix it.

''Rather than trying to make this thing perfect, I'd like to give it over to the other body and watch him work it and then we have something next year that has had a high level of scrutiny,'' Kelly said.

Senate Minority Leader Johnny Ellis, D-Anchorage, said Republicans are trying to cast the measure as a work in progress.

''I say it's a job incomplete,'' he said.

The resolution is politically popular but obscures the Republicans' lack of a spending plan for next year or the long term, Ellis said.

Donley said getting the bill out of committee will get Alaskans talking about a spending cap.

''When you start to move things, people start to pay attention,'' he said.

''The public gives us good ideas,'' he said. ''That's what we're trying to inspire.''

Donley said the new spending limit would replace one now in the constitution, approved by voters in 1982, that has never worked.

''The amount was simply set too high,'' Donley said.

The current limit started with a base of $2.5 billion. With annual adjustments for inflation and population since 1981, the spending limit is now over $6 billion, far above the amount the state has available to spend, Donley said.

''We have about a 3 billion cushion,'' Donley said.

Donley said his measure has two safety valves that allow additional spending. A two-thirds majority of the Legislature could boost spending and legislators could put general obligation bonds before voters to spend more.

Sen. Jerry Ward, R-Anchorage, said Alaskans will consider taxes as oil revenue diminishes if they are assured government spending is checked.

''This is the long-term plan that they have demanded,'' he said. ''They have said it: 'Don't cap us. Cap government first, then come talk to us,''' Ward said.

Sen. Gary Wilken, R-Fairbanks, supported advancing the measure despite reservations about the details.

Wilken said the allowance for spending increases may be too restrictive. He said he was uncomfortable lumping limits on the operating budget with limits on the capital budget. He also said the measure could limit revenue-generating arms of the government such as the University of Alaska. If the university wanted to boost its spending by raising tuition, some other agency would have to take a decrease because of the cap.

Sen. Kim Elton, D-Juneau, said the measure needed more debate.

''If we had had this spending limit in place over the last several years, the budget we adopted last year would have been too high,'' he said. ''If everybody remembers, that was the last year in the five-year cut cycle. Undoubtedly the budget we're going to adopt this cycle would be outside the parameters of this spending limit.''

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