Last year's budget vetoes still sting for lawmakers

Posted: Friday, January 18, 2008

JUNEAU - Legislators are still smarting from Gov. Sarah Palin's recent budget vetoes, now their budget director is warning they may be the fall guys if overall spending increases significantly.

House and Senate Finance Committees met jointly this week for budget overviews from the administration's budget director Karen Rehfeld on Wednesday and legislative budget director David Teal on Thursday.

Budget subcommittees are already meeting to pour over and make their own changes to Palin's spending plan for next year, which proposes to spend $4.2 billion from the state treasury on government operations and $317 million on capital projects.

State lawmakers had several bones to pick with the governor. Simmering resentments over the vetoes bubbled to the surface during Rehfeld's presentation on the capital budget for the fiscal year that starts July 1.

Palin's general fund spending on capital projects is down $41 million from the current year.

Lawmakers asked Rehfeld how they could avoid a repeat of last June when Palin whacked $95 million from capital projects around the state.

"It's pretty embarrassing to go back to the district thinking you have water, sewer and safety projects for the people and then it's gone," said Rep. Bill Thomas, R-Haines, whose rural Southeast district took a $6 million hit.

Rehfeld said the administration would try to do a better job this year of communicating what projects would pass muster. She said the vetoes didn't do the administration any good either, and she had a lot of explaining to do.

"For the most part the public was supportive of the vetoes, they just couldn't understand why their project had been vetoed," said Rehfeld.

Lawmakers should be mindful of the governor's priorities, specifically education, health and safety, and infrastructure development, Rehfeld said.

But Rep. Mike Hawker, R-Anchorage, said his district lost projects that easily met the criteria.

"We are talking about intersections where we have had repeated accidents with school buses full of children that wouldn't be at risk this winter if we hadn't vetoed that money," Hawker said.

"I just hope you folks have come to realize there are other adults in the room," he added.

Legislative Finance Director David Teal, meanwhile, warned lawmakers they could be blamed for an overall boost in operating and capital spending even if they stick with the governor's numbers.

He said the immense surplus from high oil prices has distorted the traditional budget picture and made it more susceptible to manipulation. The $3.3 billion surplus includes $2.6 billion from the current year and a projected $680 million next year.

The governor proposes to allocate the surplus to various funds, including $2.6 billion to the public education fund for future years and $1 billion to a transportation fund.

But Teal said the governor's budget spends money that was put into a special savings account last year, and using those funds makes it appear less money is being spent from the state treasury.

"The difference is the Legislature is spending general funds and the governor is spending from a savings account, which doesn't count as general funds. So the budgets are identical but it's the appearance which changes," said Teal.

al grillo / the associated press

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