Murkowski applauds lawmakers for work, vows more cuts

Posted: Friday, May 23, 2003

JUNEAU (AP) Republican Gov. Frank Murkowski lauded the Legislature for approving a budget that will ultimately reduce state spending.

''I think the action of the legislature, Republican and Democrat alike, was the kind of progress that moved in the right direction,'' Murkowski said.

Now that the Legislature has finished tailoring its 2004 spending plan wrapping up its work at midnight Wednesday the governor will begin his alterations.

Murkowski originally laid out a trimmed down budget for next year that spends $55 million less than the current fiscal year and draws $393 million from the state's reserves.

Alaska's $1.9 billion Constitutional Budget Reserve which has been used in most recent years to balance the budget could be drained in three years.

But the Legislature approved a budget that would draw about $533 million from the reserve. Murkowski says that's too much.

Murkowski failed to win legislative approval for a 3 percent statewide sales tax to help fill the budget gap. So he's promised to use his veto powers to slice $130 million from the budget.

The question is where the cuts will be made. No specifics have been worked out, Murkowski said.

''Those cuts will affect Alaskans. But we are going to try to make those cuts on the basis of objectivity, equity and maintenance of the basic services,'' he said.

Trying to win support from GOP lawmakers for the sales tax, the administration identified $188 million in cuts, including $37 million in lower-level education spending and $6 million from the University of Alaska.

Murkowski said on Thursday that his cuts are not going to threaten education, but he mentioned the need for efficiencies, citing the need to cut the number of school districts.

Murkowski gave lawmakers high marks for approving much of his agenda, despite the deadlock on the big item, the sales tax.

In all, the GOP-controlled Legislature passed 38 of 47 bills that he offered, he said.

''Everybody was on the same page,'' said House Speaker Pete Kott, R-Eagle River.

Just a dozen hours after the Legislature adjourned, Murkowski held a press conference to provide his evaluation of the session.

Much of the legislation he cited was aimed at spurring exploration and development of oil and gas in the state.

More than two-thirds of the state's revenues come from oil. North Slope production has dwindled to half its 1988 peak, and Murkowski noted only three exploration wells are planned for next winter.

Senate Bill 185 provides a severance tax credit of as much as 40 percent for oil and gas exploration. House Bill 246 increases the amount of leased acreage a producer can hold.

Murkowski has already signed into law two other bills House Bill 191 and Senate Bill 142 to change the state's coastal management program and make the Department of Natural Resources lead agency on permitting projects.

Murkowski said those bills along with his decision to move the division of habitat and the office of governmental coordination into DNR will speed projects without changing environmental standards.

Those were contentious measures for environmental groups. They say the new arrangement will steamroll projects through without adequate environmental oversight.

Murkowski said he will be seeking additional state revenues and budget cuts next year to preserve the state's budget reserve account for future years.

He would not specify what type of revenue measures he would pursue, but said the public won't accept a broad-based tax without budget cuts.

''I don't think Alaskans are ready for that, and I don't think they expect that from this administration,'' Murkowski said.

House Speaker Kott who earlier had said a sales tax proposal will likely emerge again next year sounded a more ominous warning.

''I think Alaskans are going to receive a wake-up call. And it's perhaps not going to be the one they wanted to hear,'' Kott said.

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