State lawmakers representing parts of the Kenai Peninsula Borough were expressing mixed emotions the morning after the 23rd Legislature was gaveled to a close late Tuesday night.
While much of what passed legislative muster did so with at least some bipartisan support, the peninsula's five-member Republican contingent voiced disappointment at the Legislature's failure to address the looming fiscal crisis.
Unusually high oil prices, they said, had bailed out lawmakers once again, allowing them to delay difficult financial decisions about further budget cutting or creating new revenue streams, which could include taxes.
Lawmakers also failed to agree on proposed ballot measures that would alter how the Alaska Permanent Fund was handled, that would enshrine its dividend program in the Alaska Constitution, or that would create a constitutional spending limit.
To address at least some of those issues, lawmakers may soon find themselves back in Juneau. Gov. Frank Murkowski has said he might call a special session, putting on the table ballot measures for the percent of market value approach to handling the permanent fund, as well as tax measures, such as a tobacco tax increase.
Lawmakers were able to agree on a $2.3 billion general fund operating budget and on tapping the Constitutional Budget Reserve account for up to $335 million if needed to balance the budget next spring. That decision ultimately will ride on how well oil prices fare over the next several months.
Among other things, the spending plan added some $82 million to K-12 education spending, the largest such increase in state history.
"This session went well," Sen. Tom Wagoner, R-Kenai, said early Wednesday morning. "There were no major battles between the parties, though there is always a certain amount of tension. There was some fighting between the House and Senate. It's been a learning process for everybody."
Wagoner said he was disappointed that a long-range spending plan had not advanced, and that more attention wasn't paid to a constitutional spending limit.
He said, however, that he believes oil prices are likely to remain high for the foreseeable future, and that should mean the state wouldn't have to tap the Constitutional Budget Reserve at all.
Sen. Gary Stevens, R-Kodiak, who represents the Homer-Seward area, said he was most disappointed by the failure to deal effectively with the fiscal crisis.
"With oil as high as it is it gives us another year to avoid making a decision," he said. "We did not deal with reduction of the budget or finding revenue to fill those holes."
Stevens said he had held out hopes that in the waning hours of the session lawmakers would agree to put the POMV issue on the ballot, but the Senate votes simply weren't there. It was held up in part, he said, by Democratic party members who insisted on enshrining the dividend in the Constitution. Stevens said he opposed that because it would tie the Legislature's hands by requiring a dividend payout even in the face of a major fiscal crisis.
Without the new revenue streams Murkowski has insisted upon, Stevens predicted the governor would employ his veto pen again, as he did last year.
Rep. Mike Chenault, R-Nikiski, said he thought much was accomplished during the current and previous sessions of the 23rd Legislature, acknowledging, however, "that what saved us was the price of oil."
Chenault said he gave several revenue proposals a lot of thought, but ended up opposing one of the most hotly debated -- the POMV approach.
He said he generally liked the methodology, but feared "a feeding frenzy" would develop in which lawmakers would try carving up the percentage of the fund value made available each year under a POMV approach.
Rep. Kelly Wolf, R-Kenai, decried what he said was the lack of a good working relationship between the two bodies. He pointed to the $82 million boost to education funding that he said could have been as much as $84.5 million, except that $2.5 million was diverted to capital projects "to buy (Senate) Democrat votes."
It was, nevertheless, the largest boost to education funding ever. "I'm happy for that," he said. "In the House, Democrats and Republicans put down our shields and walked the line together for our kids."
Rep. Paul Seaton, R-Homer, said he thought the House side had taken a much more critical look at and did more to develop an approach to the state's fiscal problems than the Senate did. The House, he said, actually passed a POMV ballot measure.
"We resolved a lot of problems and found how it would all work," he said. "We took the right attitude. The revenue side was important enough to have a special (House) committee design the programs."
Seaton added that many House members, him included, were frustrated by Senate inaction.
He lauded legislative success in beefing up spending on schools, but he said nearly half the $82 million increase goes to teacher and support staff retirement obligations. Lawmakers, he said, would have to investigate that system and find a way to make it work for everybody.
Wagoner said he expects the governor to call the Legislature into a special session to address revenues before the end of summer.
Seaton said he hopes the governor delays a special session until after the fall election so that lawmakers will not face the added pressures of an upcoming election as they address controversial tax issues and the future of the permanent fund.
Capital appropriations for the Kenai Peninsula Borough
Here is a look at how Kenai Peninsula Borough legislative districts fared in capital appropriations passed as part of Senate Bill 283 this week.
Homer Animal Shelter -- $130,000
Seldovia medical equipment -- $20,000
South Peninsula Hospital equipment -- $10,000
Anchor Point Fire Service Area -- $70,000
Anchor Point sewer study -- $100,000
Port Graham outfall study -- $100,000
Anchor Point water system -- $1.27 million
Lowell Point sanitation -- $2.856 million
Nikolaevsk water and sewer -- $1.75 million
Voznesenka water improvements -- $2.25 million
Beluga Lake floatplane base improve -- $1.235 million
Port Graham Airport master plan -- $170,000
Seldovia snow equipment building -- $1.4 million
Nash Road (Seward) rehabilitation -- $1.3 million
Seward Marine Center rehab (U of A) -- $26 million
Kachemak Bay Ferry planning & design -- $2 million
Seward Road improvements -- $2 million
City of Kenai water-sewer system analysis -- $50,000
City of Soldotna water-sewer system analysis -- $50,000
KPB Cooper Landing senior housing road -- $75,000
KPB Arctic Winter Games -- $100,000
KPB Funny River pedestrian safety light -- $10,000
KPB North Star Elementary School sign -- $7,000
KPB Ninilchik tanker truck -- $18,250
KPB Nikiski Community Center renovation -- $45,000
KPB Sterling Community Club facility Phase II -- $42,250
McLane Center ADA improvements -- $15,000
Kenai River Watershed Forum projects -- $125,000
Ninilchik Fair parking improvements -- $125,000
AVTEC deferred maintenance -- $1.5 million
Kachemak community projects -- $1,598
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