Alaska State Legislature

News From The Senate and House Majorities

House: Ken Freeman (907) 465-3804
Senate: Wendy Lindskoog (907) 465-4582
State Capitol
Juneau, AK 99801
Actuality line: 1-800-478-6540
web site: http://www.akrepublicans.org

Finance Leaders Announce FY98 Revenue

Windfall To Help Balance State Budget

For Immediate Release: March 6, 1997 Contact: Rep. Mark Hanley (907) 465-4939 or Senator Drue Pearce (907) 465-4993

JUNEAU - Legislative finance leaders Thursday announced an unexpected one-time revenue source of $27.6 million from the Alaska Housing Finance Corporation (AHFC) to be used to close the state's fiscal gap.

"We can draw $27 million less from the Constitutional Budget Reserve (CBR) in FY98, thanks to a one-time, unexpected windfall from AHFC," announced Mark Hanley, Co-chair of the House Finance Committee.

"My intention is to use this windfall to help close the gap, rather than using additional money from the CBR. With less money taken from the reserve, we’ll earn an additional $2 million in interest each year. That $2 million is more than corporate taxes paid by the mining, airline, insurance and real estate industries combined," continued Hanley.

According to the five-year budget plans of the House and Senate majorities, spending reductions over a five year period will allow recurring income from the CBR to bridge the gap between state revenues and spending.

"The CBR is crucial to Alaska’s long-range budget problems. This windfall will help us preserve this important savings account," said Senator Drue Pearce, Co-chair of the Senate Finance Committee.

"Lately, AHFC and AIDEA dividends have been used to increase spending, rather than closing our fiscal gap. The Governor's FY98 capital budget is a good example. I am afraid Knowles' approach could prove dangerous to those important state assets," said Hanley.

Pearce said the Legislature’s Auditor tracks the status of AHFC bond issues, and discovered the imminent release of some "collateral" money held to insure a major bond program.

"That program has been concluded, and the $27.6 million held in the state Mortgage Insurance Fund can be released, according to Standard & Poors, without jeopardizing AHFC’s bond rating," said Pearce.

A press release confirming the status of the Mortgage Insurance Fund was issued by Standard & Poor’s rating service on Wednesday.

Broadcast Note: Audio actualities are available by calling 1-800-478-6540.

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