Anchorage -- Leaders of the Republican-led House Majority reacted cautiously to initial readings of Governor Knowles' Fiscal Year 2001 budget, which the Governor refers to as his "Children's Budget." Legislators say it is much too soon for an in-depth analysis of the Governor's budget. However, leaders expressed deep concern over the Governor's proposed increases in spending which would create a huge deficit and deplete the State's Constitutional Budget Reserve by approximately $850 million.

While the Governor states that his new budget saves Alaskans nearly $22 million from foundation formula and loan program decreases, in fact, his budget spends these savings and an additional $102 million over the current year's spending, resulting in a growth of agency spending of over $124 million. The accounting methods illuminate a major philosophical difference between the Republican-led Legislative Majority and the Knowles Administration, with the Majority maintaining that spending money saved in one place on new or expanded programs is not a true savings.

"I share the Governor's concern for Alaska's children and future," said House Finance Committee Co-Chair, Representative Gene Therriault (R-Fairbanks). "But common sense leaves me no alternative but to question whether his tactic of raiding the kids' piggy bank with a whopping $124 million spending increase is the appropriate way to take care of those kids."

The Knowles Administration estimates an $18.26 per barrel price for North Slope oil in the coming year. Based on that estimate, the Governor calls for funding his massive budget with approximately an $850 million draw from the State's Constitutional Budget Reserve (CBR). However, if oil prices drop in the next year, the amount of that draw could soar even higher.

"Alaska would likely have drawn as much as a billion dollars from the CBR this year had not oil prices risen above estimates," said Representative Con Bunde (R-Anchorage), Vice Chair of the House Finance Committee. "While I understand the Governor's concern for our kids, his proposed budget would put us right back in almost the same position we were in last year at this time; it puts us at the mercy of OPEC and other forces outside our control, not my idea of securing our kids' or anyone else's future."

Representative Therriault was concerned that, while the Governor proposes huge increases in spending, there is still no accounting for the monies already being spent.

"If we really want to protect our kids and Alaska's future, we need to answer some longstanding legislative requests regarding accountability for existing spending," Therriault said. "If the huge amounts of money we're already spending are not getting the job done, why not? Wiser spending of existing monies should be the preferred alternative."

"It appears from the September 14th vote that some Alaskans wanted spending sharply curtailed, while others were calling for new taxes," said Speaker Brian Porter. "The budget the Governor has unveiled will satisfy none of those people. It does not decrease spending; rather it significantly increases it; it also dips further into our bank account without any alternative sources of revenue.

"We must do better, and, working together, we will," Porter said.

The Second Session of the 21st Alaska Legislature convenes in Juneau on January 10, 2000.