Sen. Dave Donley State Capitol, Room 508 Juneau, AK 99801-1182 Phone: (907) 465-3892 Fax: (907) 465-6595

Sen. Pete Kelly State Capitol, Room 518 Juneau, AK 99801-1182 Phone: (907) 465-2327 Fax: (907) 465-5241

Fiscal Responsibility Bills First Step
in Developing Long Range Fiscal Plan

(JUNEAU) - The Senate Finance Committee introduced a series of bills today designed to build on the successful accomplishments of the Republican-led Majority's five year plan by continuing fiscal responsibility in state spending. This legislation is the first step in developing a new long-range fiscal plan for Alaska.

"After hundreds of millions of dollars in reductions over the past five years, only challenging spending reductions remain to be accomplished," said Sen. Dave Donley (R-Anchorage), co-chair of the Senate Finance Committee. "Most state spending is guided by statutory formulas or provisions. Therefore, to make significant additional efficiencies and reductions, statutory changes are needed."

"Additional state revenue will be a needed element in a new long-range fiscal plan," said Donley. "But the first step in such a plan should be continued government reforms to create a more efficient and fairer state government. Only after such needed reforms should Alaskans be asked to consider any major new taxes."

The Senate Finance Committee Long-Range Fiscal Plan legislation package reforms programs that don't make sense or are discriminatory (as evidenced by recent legislative reports) and improves constitutional provisions.

"This package presents the first step in development of a new long-range fiscal plan that has the potential of reducing the fiscal gap by over $12.5 million a year at first with reductions increasing to over $100 million within 10 years," said Sen. Pete Kelly (R-Fairbanks), co-chair of the Senate Finance Committee.

The following bills were introduced:

SB 180: Updating Geographic Differential Annual Savings would be $183,300 for 1st 6 years, $312,000 each year thereafter.

SB 181: Eliminating Alaska Housing Finance Corporation 1 percent HALF subsidy Annual savings of over $500,000 per year could be available from AHFC to general fund.

SB 182: Requiring Proration of Benefit Payments Annual savings depends on program funding levels in budget.

SB 183: Reforming Public Interest Litigant Attorney Fees Annual savings would average $117,100 per year at 25 percent savings.

SB 184: Allowing Local Contribution to Village Safe Water Program Projects Annual savings of $2,700,000 at a 5 percent local contribution rate could be realized.

SB 185: Reforming Power Cost Equalization (PCE) Annual savings of $9,000,000 per year could be realized.

SB 186: Municipal Bonding Capacity Cap State revenue could increase by over $100 million a year within ten years.

SJR 24: Constitutional Budget Reserve (CBR) Promotes fiscal discipline and provides for a more efficient budgetary process by amending article IX, sec. 17 of the Alaska Constitution to clarify "the amount available for appropriation" which was improperly interpreted by the Alaska Supreme Court in Hickel v. Halford and Cowper et al. The Court's decision distorts the true intent of the 3/4 vote and allows a small minority of legislators to "blackmail" the majority into increased spending each year. This change also repeals the so called "sweep" provision, which if left unchanged would defeat the purpose of the amendment.

SJR 23: Constitutional Spending Limit Provides a needed step to ensure future fiscal discipline and help limit growth in the State's fiscal gap.

"In the face of future deficits we should be finding ways to decrease our state spending," said Donley. "The advantage to each of these bills is that they bring savings through reforms of outdated or inefficient programs, without cutting necessary services that Alaskans depend on."

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