News from the Senate Majority

Alaska State Legislature

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

Senate Passes Capital Budget -- Meets $100 Million Target, Protects Rural Alaska and Increases Permanent Fund

For Immediate Release: May 7, 1997 Contact: Senator Bert Sharp 907/465-3004

Juneau -- The Alaska State Senate Wednesday passed the state capital budget by a vote of 14 to 5 placing high priority on rural Alaska projects and addressing spending priorities statewide. The budget meets the Republican-led Majority’s general fund spending target of $100 million.

Senator Bert Sharp, Co-Chair Senate Finance, noted that the FY 98 capital budget is designed to secure and optimize federal and non-state matching fund sources. "A lot of hard work has gone into creating a budget that is fiscally responsible and captures available federal funds. This budget is proof we can meet our targeted Five-Year plan capital spending goal of $100 million while responsibly addressing the state’s necessary projects," Sharp said.

"It would be a lot easier to simply fund everyone’s wish list, but we simply cannot continue to spend money faster than we make it. Until Alaskans tell us they are ready for new taxes or will use their Permanent Fund to pay for state facilities and services, we must reduce the size of state government," Sharp said.

Senator Drue Pearce, Co-Chair Senate Finance, emphasized that the Majority is trying to narrow the state’s deficit spending while the governor continues to insist on spending levels that would make the problem worse.

"The Governor claimed we unfairly targeted rural Alaska for substantial cuts," Pearce said. "It’s outrageous for the Governor to say we’ve hurt rural Alaska when three rural Senate Districts are receiving 22 percent of the total capital budget. The residents of Anchorage, who represent nearly half of the state’s population, receive only $67 million dollars, or only about 11 percent of capital funding."

"The capital budget maximizes the things we can do with $100 million in general funds. Although it represents significant reductions from the total number of projects proposed, the budget meets our long-range goal to close Alaska’s fiscal gap while ensuring that necessary statewide projects are addressed to every extent possible using the limited resources available," Sharp said.

The Senate’s version of the capital budget:

• Fully funds all Village Safe Water Grants and Municipal Matching Grants for sewer and water.
• Captures $26.8 million in federal funds for the Alaska Drinking Water Fund with $5.4 million in required matching funds.
• Funds senior citizen housing requested last year and increases the total budget for special needs housing for those unable to care for themselves.
• Provides renovation and construction funding for domicilary care facilities in both Anchorage and Fairbanks. In concert with money added into the operating budget, these projects will help address the needs of chronic alcoholics.
• Provides $2.4 million required match funding for Corps of Engineers Harbor projects including Kake, Larson Bay and Kodiak Harbor construction, as well as additional funds for the Bethel Seawall.
• Provides $297 million in transportation funding including:

1. $99 million for aviation projects;
2. $66 million for National Highway System projects;
3. $52 million for Community Transportation Program projects;
4. $45 million for statewide transportation projects;
5. $20 million for Anchorage Metropolitan Area Transportation Study projects; and
6. $15 million in Trails and Recreational Access projects.

• Allows for the capture of $19 million in federal funds for the Coal-Water Fuel projects without compromising the integrity of the Alaska Science and Technology project review process.

In last night’s debate on the capital budget, Senator Rick Halford (R-Chugiak) offered an amendment that would place $661 million of this year’s record investment earnings into the principal of the Alaska Permanent Fund. The amendment was adopted unanimously to follow through on the Majority’s "Commitment to Alaska" to protect the integrity of the Permanent fund.

"This amendment is completely consistent with the common sense, conservative fiscal approach of the Republican-led legislature," Halford said. "Balancing your budget and bolstering your savings are basic elements of a solid financial foundation."

"It is popular to say yes to increased spending. In Alaska today, however, we must not allow more spending that only increases the Alaska’s fiscal gap. Alaskans are sophisticated enough to realize that if the state spends more money than it makes, new taxes will be required. This capital budget provides for many of the basic needs throughout the State. It controls the capital budget appetite, doesn’t rely on new taxes and protects the Permanent Fund," said Sharp.

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= Mike Miller = Bert Sharp