University budget once again will be prominent in state financial debate What others say

Posted: Wednesday, November 12, 2003

The budget request approved last week by the University of Alaska Board of Regents comes as no surprise. University officials had made known many weeks ago that they would be asking for the 5 percent increase that Gov. Frank Murkowski had said during his campaign would be part of his annual spending plans.

What Alaskans should know now is that the university is actually asking for quite a bit more than what is stated in its fiscal 2005 budget, which does little more than accommodate increases in fixed costs such as salaries.

How so? The Board of Regents excluded from the budget a roughly $9 million increase in its obligation to the state-run employee systems.

Yet that retirement obligation cannot be avoided. And it brings the total university request to nearly $20 million above what it received last year and ensures that discussion of the university budget will once again be a prominent and volatile piece of the larger debate over the state's finances.

Excluding the increase in retirement costs is not a sleight of hand by the Board of Regents, however. Rather, it is an effort to draw legislative attention to a problem caused by the national surge in health-care costs and lower-than-expected investment returns. The problem, which the regents hope to see remedied separately by the Legislature, undercuts the fiscal soundness of state and local government entities throughout Alaska.

The university last year was one of the few state entities to see an increase over its prior year funding, a fact not lost on legislators who do not have university facilities in their districts. Odds are good that those legislators will be reluctant to support additional money with the governor and his aides talking about cutting overall state spending in fiscal 2005 by $250 million a target they say is needed just to limit the withdrawal from the budget reserve to the governor's target of $400 million.

The governor said last year, while on the campaign trail, that he wanted the state's general fund to provide 5 percent annual increases for the university until a lands endowment could be created to provide supplemental funding.

So far, Alaskans have seen neither.

Fairbanks Daily News-Miner - Nov. 8

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