Alaska State Legislature
News from the Senate and House Majorities

Wendy Lindskoog, Senate Majority Press Secretary, (907) 465-4582
Jerry Ritter, House Majority Press Secretary, (907) 465-3804
State Capitol
Juneau, AK 99801
http://www.akrepublicans.org
Actuality Line: 1-800-478-6540

Governor’s Supplemental Budget Increases the Fiscal Gap

For Immediate Release: February 12, 1998 Contact: Senator Drue Pearce at (907) 465-4993 or Rep. Mark Hanley at (907) 465-4939.

Juneau – After reviewing the Governor’s supplemental budget proposed Tuesday, Legislative Finance Leaders say the governor’s request adds back every single dollar that the Republican-led Majority saved last year through budget reductions to the fiscal year 98 budget.

Senator Drue Pearce (R-Anchorage), Co-chair of Senate Finance, explained that since the Governor came into office, he has said he is committed to closing the fiscal gap. "Because oil prices have dropped to the lowest level in five years, our revenues are hundreds of millions of dollars lower. Our fiscal gap is growing and the Governor's proposal to spend $60 million more makes it even worse."

Representative Mark Hanley (R-Anchorage), Co-chair of House Finance said "The Governor is proposing $60 million in increased spending in the supplemental and $45 million in increased spending for next year. Over $100 million of additional spending erases previous reductions, and deepens the fiscal gap."

Pearce said that supplementals are, by law, supposed to be additional funds for the current fiscal year to cover deficiencies or unexpected needs. "Roughly 25 percent of the governor’s supplemental covers ‘deficiencies and unexpected needs’. The other 75 percent should appropriately have been requested in his formal budget proposals," Pearce said.

"We budgeted $16.5 million dollars in our spending plan last year for supplementals in fiscal year 98. The Governor, in December, put his plan on the table calling for fiscal year 98 supplementals of just $13.8 million dollars. For this reason, the Governor’s $60 million supplemental request came as a big surprise," said Pearce.

"The Governor is playing a dangerous shell-game with the public, trying to imply that the money he wants to spend is 'free' or a 'windfall.' Very simply, each dollar spent in the supplemental decreases our savings account," Hanley said.

Points of question raised by the Governor’s Supplemental Budget request include:

• The proposed supplemental bill contains over $22 million for a variety of capital projects. Traditionally, capital projects have been requested in the capital bill rather than the supplemental bill.
• The supplemental bill total exceeds the amount anticipated for FY98 supplemental appropriations in the Governor's budget plan by over $40 million. The Governor's budget plan, presented in December, had earmarked $16.5 million in projected supplemental requests.
• Funding for "true and unanticipated emergencies" constitutes approximately 25% of the total amount requested.
• Adequate levels of funding for significant portions of items like fire suppression and disaster relief could have been anticipated in the governor's December budget request rather than deferred to the supplemental process.

"A few years back the Governor spoke about the bumper sticker seen on the back of motorhomes - "I'm spending my kid's inheritance." The Governor indicated that this was an irresponsible attitude. Today, taking into consideration the Governor's $60 million spending proposal, I think I need to check the governor’s bumper," said Therriault.

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