Rep. Hanley's Response to the Governor's State of the Budget Speech
January 15, 1998

by Co-Chairman, House Finance Committee, Representative Mark Hanley

Good evening, My name is Mark Hanley and I am here with Senator John Torgerson to describe the Republican majorities’ approach to the budget and our plans for Alaska’s long term financial health.

Our approach is based on one simple premise that Alaskan families understand -- live within your means, spend only what you make.

We listened to Alaskans’ requests for a smaller, smarter government and developed our five year plan to close the fiscal gap. It gradually reduces spending until it matches our income. We are on course to close the gap, and because we’ve been able to stabilize government spending, the private sector is growing with more jobs than ever before and unemployment is low.

The Governor just finished his budget speech tonight and we’ve been asked, "What’s the difference between our approach and his?" Simply put, the Governor wants to spend more and increase our deficit, we want to spend less than last year and decrease our deficit. Under our approach the fiscal gap is closed by 2001, under the Governor’s approach the gap remains. Spending less also means less taxes. More spending by the Governor means more taxes.

Two years ago shortly after releasing our five year plan, Governor Knowles proposed his "Safe Landing Budget Plan." I’m happy to report that instead of $100 million in reductions proposed in his plan, by working together, we’ve been able to reduce spending by double that amount.

This means that we don’t have to reinstitute an income tax like the Governor had proposed for next year. And instead of increasing your car registration fees by 50% as he proposed, we changed registration to every two years, reducing the hassle on car owners and decreasing the work load for state employees. You also won’t see the Governor’s proposed tax increase of 14 cents a gallon on gasoline.

Less spending does mean less taxes. And we are on track in the third year of our five year plan to close the gap and live within our means.

But our plan to live within our means isn’t only about reducing spending, it’s also about prioritizing. In the last three years we have spent more money on education, more money on public safety, and more money on foster care and child protection while at the same time reducing our fiscal gap. Well educated, safe and healthy kids are our top priority.

But spending more money isn’t the only answer. We want to make sure we get what we pay for in our five billion dollar budget. It’s a major concern when we spend the highest amount in the nation per capita on education, yet our students only score in the 50^th percentile. Education Week recently released a report where they commented that educators in Alaska have "a level of per pupil resources their colleagues in the lower 48 can only dream about." Yet they gave us C’s, D’s and F’s for our education system. It is not just spending that’s a problem. We can’t just adopt a philosophy of "show me the money", we also need to say "show me the results."

Our goal is to develop budgets based on results. That requires cooperation between the legislature and the administration to develop goals, evaluate performance and require accountability. Good performance should be rewarded and emulated, poor performance should be altered and ultimately eliminated.

We have a rich state with tremendous potential. Alaskans have a bright future. But we can’t ignore declining oil prices and production. We do have a fiscal gap and it can’t be closed by increasing spending. We care about Alaska’s future which is why we intend to stick with our plan to follow our premise and live within our means.