Legislators boost spending by $120 million

Posted: Thursday, May 10, 2001

JUNEAU (AP) -- By the time they gaveled out Tuesday night, legislators had agreed to spend about $2.4 billion in general funds to run government and help pay for construction and maintenance work in the coming fiscal year.

That's about $120 million more than the state is spending in the current fiscal year, which ends June 30.

Legislators also committed about $134 million in future income on school, university and ports and harbor projects.

The budget reflects the end of the Republican-controlled majority's five-year plan, which called for cutting $250 million in general fund spending over five years.

House Finance Committee Co-chairman Eldon Mulder said the majority didn't start out with a specific spending limit this year in crafting the budget. The objective was to maintain essential services and not allow much growth other than in the priority area of education.

Mulder said about a quarter of the increases in the $2.27 billion operating budget for fiscal year 2002 were in university and public school spending.

''I think those increases are a reflection of the majority's desire to focus on education this year,'' Mulder said.

The Department of Health and Social Services also saw increases, with spending rising on Medicaid, subsidized adoptions and foster care. An increase in bond debt also added to the higher costs, Mulder said. So did a need to replace one-time fund sources that were used in the current year's budget.

The state will pitch in about $112 million from the general fund on the $1.4 billion capital budget, which is mostly paid for with federal funds.

The biggest chunk of that budget is for airports, road and ferry projects, said House Finance Committee Co-chairman Bill Williams, R-Saxman.

Senate Finance Co-chairman Dave Donley, R-Anchorage, said the Legislature held spending in the operating budget below population and inflation growth.

Office of Management and Budget Director Annalee McConnell said the Knowles administration received some, but not all, of the funding increases requested in the governor's budget.

''In general, I would say that we made some progress in most of the areas that the governor had presented at the beginning of session as key priorities,'' McConnell said.

Lawmakers put $18 million more into the state's basic school funding formula this year, although about $3.8 million of that was directed specifically at providing property tax relief in municipalities. They also provided $12.4 million in school grants -- $6.2 million more than last year.

The Knowles administration had asked for a $45 million increase in school funding.

The Legislature provided $14.3 million of a requested $16.9 increase in University of Alaska funding.

McConnell said legislators funded eight of the 25 new troopers requested, three of 20 new village public safety officer positions, four of eight requested constable jobs and provided a raise and better benefits for VPSOs.

The Legislature agreed to part of the administration's request for extra public health funding to combat a rise in tuberculosis and hepatitis C and about half of the requested increase in Head Start, she said.

Legislative Fiscal Analyst David Teal said the budget includes a projected deficit of about $625 million, which has to be drawn from the Constitutional Budget Reserve, a state savings account.

In addition to the immediate spending, legislators also approved $110 million in bonds to be repaid with income from a tobacco litigation settlement. The bonds will pay for three new schools in rural Alaska and provide planning money for a fourth.

It will also pay for 28 major school maintenance projects, about $20 million in university projects and about $14 million of port and harbor work.

That bond program, combined with one approved last year, will tie up 80 percent of the money the state receives from the tobacco settlement, perhaps for the next 15-18 years, McConnell said. Legislators agreed to divert the remaining 20 percent to an account that could be used to help people stop smoking and prevent them from starting.

Legislators also agreed to partly reimburse municipalities for bonds they will sell for school projects. That $24.1 million commitment, which will be repaid with general funds starting in the 2003 budget year, will help build a school in Kiana, help renovate the high school in Juneau and help pay for work on a school in the Aleutians East Borough.

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