News from the Senate Majority

Alaska State Legislature

Wendy Lindskoog, Senate Majority Press Secretary
State Capitol
Juneau, AK 99801-1182
Phone: 907/465-4582
web site: http://www.akrepublicans.org
Broadcast Actualities: 800/478-6540

For Immediate Release: April 7, 1997 Contact: Senator Drue Pearce, 907/465-4993

Proposed Senate Operating Reductions Protect Education, Public Safety, Roads and Airports

Juneau -- In a press conference Monday, members of the Senate Finance Committee discussed their proposed Senate operating budget that reduces approximately $41 million from the Governor’s requested operating budget and prioritizes spending to protect education, public safety, roads and airports.

Senator Drue Pearce, Co-Chair Senate Finance, noted that these reductions, combined with proposed capital and debt service spending reductions, keeps the Senate on target to reach the Senate and House Majoritys’ $60 million reduction goal for fiscal year 1998.

"The Senate budget is in line with the Republican-led Majority’s strategy to reduce government spending by $250 million and close Alaska’s fiscal gap in five years," said Senator Pearce.

"Some say there is no gap, but the facts tell a different story. Oil production is declining, oil revenue is declining, and state government is still spending more money than it makes each year. This year the deficit, or fiscal gap, is approximately $200 million," Pearce said.

"Even though the Majority’s proposed reductions to next year’s budget represent less than one percent of total state government spending, the Governor would have everyone believe that these reductions will devastate state government," said Pearce. "A $60 million reduction this year would amount to about $110 per Alaskan resident while the Permanent Fund Dividend this year is expected to increase approximately $145 per person."

Pearce noted that in reality, Alaska’s economy is stronger and healthier today than it was two years ago. As acknowledged by the Governor in his State of the State Address, in the past two years, 4,600 new jobs were created and more than 600 new businesses started in Alaska. And for four years in a row, the annual unemployment rate has remained below eight percent.

"This growth has occurred at the same time the Republican-led Majority has made substantial progress in controlling government spending," Pearce said.

Pearce noted that the Senate budget process this year marked a shift in the way the Senate finance subcommittees reviewed fiscal information from agencies and the public on the Governor’s requested budget. Rather than make across-the-board cuts, the subcommittees prioritized programs in order of importance within each agency.

"This program-oriented system of budgeting provided a framework for the Legislature to "protect" high priority programs against significant cuts and more easily reduce funding for lower priorities," Pearce said. "Among the programs we considered necessary this year are foundation formula funding for K-12 education, putting more troopers and village public safety officers in the field, and maintenance of our roads and airports."

"Cutting the budget is never easy to do -- but we promised voters we would make the tough decisions to create a smaller and smarter government. We plan to follow through on that promise," said Pearce.

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Broadcast note: Radio Actualities are available by calling 800/478-6540.

Proposed Senate Operating Budget

The Facts:

+ Oil production is declining

+ Oil revenue is declining

+ Alaska’s expenses are higher than its revenues

= Alaska has a fiscal gap

• Alaskans voted to send a larger majority of Republicans to Juneau. We consider that an acceptance and approval of our efforts to balance the state’s budget and close the budget gap by focusing on budget cuts rather than instituting an income tax or attacking the Permanent Fund dividend program.
• Our goal is to create a smaller and smarter government by eliminating overlap and duplicative efforts between agencies, and trimming areas we feel are inefficient or are nonessential functions of government.
• The spending priorities we defined in our budget include education, public safety, and our transportation system with emphasis on maintenance of our roads and airports. Because we must reduce the size of government -- all other spending is on the table.

Department of Administration:

• Pioneer Homes are funded at a higher level than last year.
• Streamlined central administrative functions to realize savings.

Economic Development:

• Focused on identifying areas of duplication across Departmental lines to streamline services and realize savings through more efficient services.
• Identified areas of excessive overhead in the Division of Agriculture to help preserve the Agriculture Revolving Loan Fund balance for loans to farmers.

Department of Community and Regional Affairs (DC&RA):

• Fully funded child care grants.
• Maintained current funding level for Head Start programs.
• Maintained funding for rural energy programs.
• Kodiak Launch facility development funded fully
• Maintain current Alaska Tourism Marketing Council tourism marketing efforts
• Consolidates state economic development programs.

Department of Corrections:

• Exceeds the actual expenditures of the FY 96 budget by over $1 million dollars.
• Provides funds for 150 more prison beds accomplished by changing funding priorities to reflect a need to address our capacity problem. Encourages the department to make better use of low cost alternatives to hard beds.
• Allows access to over $5 million in new federal crime bill funds to provide additional beds over the next two years.
• Proposed $50,000 appropriation to the Rural Affairs Coordinator to review the cultural relevance of the inmate programs we provide. Programs that don’t fit a person’s culture are rarely successful. When over 35% of prison population is classified as Native, we need programs sensitive to that fact.
• The budget requires state employees travel less.

Court System:

• Funded a Standing Master and a Family Court Master to deal with burgeoning caseloads related to domestic violence and family matters.
• Funding for several clerks, a Systems Analyst, a Federal Compliance Officer, operations and maintenance for the Kenai court allows for continued improvements in the case management system.
• Funding allows for rent increases.

Department of Education:

• Fully funded K-12 education.
• Focused on reducing administrative overhead in the Commissioner's office.
• Funded Vocational Rehabilitation at requested level with no reductions.
• Funded Alaska State Council on the Arts at requested level with no reductions.

Department of Environmental Conservation (DEC):

• Fully funded air and water quality programs.
• Fully funded statewide public services including domestic waste water management, enforcement, and compliance assistance, and the public service offices.
• Funded seafood and sanitation inspections to ensure public safety.
• Funded all federally mandated programs.
• Realize savings in the solid waste department by streamlining the department while maintaining quality service and state control.

Department of Fish and Game (F&G):

• Stopped Governor's efforts to use Fish & Game fund money for activities not relating to sport hunting and fishing. The Senate budget retains the integrity of these state and federal revenues by reserving them for management of fish and game harvested by license holders as required by state and federal law.
• Added $96,100 in General Fund Designated Program Receipts for the developing Southeast Sea Urchin fishery.
• Provided funding for "Watchable Wildlife" programs, requiring most to be self supporting. Also encouraged the Department to consider granting concessions to the private sector to operate these programs.
• Proposed a FY'98 Department of Fish & Game budget $2.4 million higher than FY'96 actual.
• Provided $389,800 to fully fund last month’s Board of Game decisions to intensify game management activities in Game Management Units 19D and 20C.

Department of Health and Social Services (H&SS):

Ensures access to basic health care for the poor, elderly and disabled:

• Medicaid -- Funds medicaid options including artificial limbs, hearing aids, eyeglasses, dental care, mammography, etc.
• Increases Emergency Medical Services grants by $200,000 for emergency medical equipment and training.

Better protects and cares for Alaskan Children:

• Increases funding for Women, Infants, and Children: Budget provides for an increase of $750,000 worth of baby formula and other necessities for children.
• Increases funding for the Infant Learning Program so that more children will be served.
• Increases funding for Foster Care/Adoptions: Increases state funding for foster care and subsidized adoptions, including those children with special needs.
• Increases state funding for the Healthy Families program.
• Starts an Inhalant Abuse Program.
• Replaces vanishing federal dollars with state dollars in the area of child protection programs.

Provides increased funding for Alaska’s juvenile justice system:

• Adds youth probation officer/community diversion grants.
• Adds money for increased staffing levels at McLaughlin.

Department of Labor:

• Funded all but 0.3 percent to protect the integrity of the Department’s programs that ensure the health and safety of Alaska’s workforce.
• The slight reduction will not affect the Department’s ability to receive federal funds -- more than 50 percent of the Department’s budget is derived from federal dollars.

Department of Law:

• Fully funded the Criminal Division’s request to further the Republican-led Majority’s commitment to safe neighborhoods.
• Added $88,400 to increase the Criminal Division’s Medicaid Provider Fraud investigation efforts.
• Restructured the Department's budget to enable Department managers and the Legislature to identify where the state's legal efforts are being directed. This will help future Legislatures determine the necessary level of funding required for the Department and encourages improvements in the management of our state's legal resources.

Military and Veterans Affairs (DM&VA):

• Fully funds veteran programs.
• Slightly increases funding for National Guard facilities/program.
• Fully funds emergency services.

Department of Natural Resources (DNR):

• Fully funded Oil & Gas programs which will further encourage exploration and development
• Fully funded Parks budget to keep campgrounds and parks open.
• Saved the Agriculture Revolving Loan Fund (ARLF) for future Alaskan farmers, rather than for funding the Division of Agriculture.
• Maintained current efforts in Timber and Mining.

Department of Public Safety:

• Added funding for two additional Alaska State Troopers.
• Focused on reducing administrative overhead in the Commissioner's office.
• Re-opened an Alaska State Trooper post on the Kenai Peninsula that had been recently closed.
• Funded grants for victim services.
• Fund lapse in supplemental bill funds five additional village public safety officers.

Department of Revenue:

• Encouraged the Department of Revenue to look at more efficient and cost effective ways of providing child support enforcement services. The Legislature intends to provide the incentive and the means to compare performance of the private sector contractor with the performance of the Child Support Enforcement Division. The budget structure urges partial privatization beginning January, 1998.
• Saved $233,900 by eliminating gaming as a separate division, returning the gaming audit and enforcement responsibility to the Income and Excise Audit division - - this eliminates administrative overhead, while ensuring the gaming regulatory functions are maintained at current levels.
• To realize $170,000 in savings, we encouraged the Oil and Gas Audit Division to accelerate the schedule for taking advantage of the Retirement Incentive Program.

Department of Transportation and Public Facilities (DOT&PF):

• Restructure budget allocations to direct additional funding for road and airport maintenance.
• Reduce top-heavy administrative and bureaucratic costs and redirect the money to vessel operations of the Marine Highway System.

University:

• With a reduction of only 2.5 percent in general fund spending, the overall University budget is still increased by more than $6 million from last year.

Information Technologies:

• Provide for reduced technology costs through group purchasing and standardization of hardware and software.
• Reduced random, uncoordinated purchases of computer equipment.