State legislators challenge Palin's budget proposal
Hearing on state revenue projections set for today
Members of the Republican-led House Majority Caucus said Wednesday they will be taking a hard look at next year's budget, and they challenged the numbers Gov. Sarah Palin used to develop her budget proposal.
Rep. Mike Hawker, R-Anchorage, said the Palin administration's oil price forecast of $74.41 a barrel for the next fiscal year was too optimistic.
"No credible economist was in agreement; they all felt that was an aggressive number," Hawker said.
At a hearing at 1:30 p.m. today, the House Finance Committee will further examine the state's revenue forecast.
Hawker, co-chairman of the powerful House Finance Committee, spoke Wednesday at a press conference with the leadership of the House majority, led by Rep. Mike Chenault, R-Nikiski, who will serve as speaker this session.
The administration should "actively reassess" its budget request, Hawker said.
The Legislature faces a deficit at current oil prices that could amount to billions of dollars, but it also has billions of dollars on hand to help protect the state from such deficits.
"How much of our reserves are we willing to spend?" is the question facing the Legislature this session, he said.
Rep. John Coghill, R-North Pole, who has been a legislator for more than 10 years, said oil prices that the state bases most of its budget on have always fluctuated.
"I've seen us go from $8 (a barrel) to $148, and back down," he said. "We live in a very volatile economy."
When last year's budget was finalized, oil prices were still on a multiyear upswing, Hawker said.
"From a financial standpoint, it's a whole new world since we left here last spring," he added.
The Department of Revenue will publish its Spring Revenue Sources Book in April, but will provide an interim oil price estimate for legislators in late March.
Coghill said the Legislature always has a difficult time determining future budgets because it must finalize the budget for the fiscal year beginning July 1 months before that date.
"The further away from that date, the harder it is to predict how it is going to end," Coghill said.
Hawker said he will also propose an increase in eligibility for the Denali KidCare program, the state's Medicaid coverage for children. He said he'd like to expand eligibility for Denali KidCare up to 250 percent of the poverty level, but also require payment based on income levels for those between 175 percent and 250 percent of the poverty level.
"We must add an element of personal responsibility into these programs," he said.
• Contact reporter Pat Forgey at 586-4816 or at pat.forgey@juneauempire.com