Knowles budget rejected

Posted: Monday, January 24, 2000

The governor's budget is effectively off the legislative table.

Just a week after Democratic Gov. Tony Knowles introduced his operating budget to fund state programs for the 2001 fiscal year, the Republican majority took the dramatic step of throwing it out and starting over from what amounts to fiscal scratch.

GOP leaders said today they would introduce the spending plan approved by the governor and the Legislature last year as the ``new starting point'' for this session's budget negotiations.

Sen. Sean Parnell and Rep. Eldon Mulder, Anchorage Republicans and co-chairmen of their chambers' Finance Committees, said the governor's proposal was asking for too much more - about $140 million - than the GOP majority was willing to spend.

Bills will be introduced today to take the place of the budget legislation Knowles offered.

``The House and Senate Finance Committees will introduce operating budget bills that mirror the current year's budget,'' Parnell said.

``In total, where the governor wants to increase state spending by $140 million in the next year and we want a spending decrease, it seems to us that the only real starting point for discussions is that common ground, that area of agreement from last year.''

For fiscal year 2001, Knowles proposed spending some $100 million more in general funds than what has been approved for the current, FY 2000 budget year.

Increases to the University of Alaska, foster-care programs and child-safety programs made up most of that $100 million. Not included within the new startingpoint budget are one-time savings, such as the $20 million gleaned due to a downturn in school enrollment.

Parnell and Mulder said the budget move had the backing of the GOP majority caucuses in both the House and Senate.

Republicans have consistently said they would look to cut $30 million of general fund spending for FY 2001, a goal that today's move appears to make easier.

The move turns budget negotiations upside down for the 2001 fiscal year, which starts in July. Rather than starting with the governor's request and working down, the GOP majority is starting with the current year's budget, and will force Knowles to argue spending up, Mulder and Parnell said.

Knowles' proposed 2001 spending plan totals $6.7 billion and includes $2.4 billion of general fund spending.

The 2000 budget totaled $198 million less than the 2001 proposal, about half of which was general fund money. The 2001 Knowles budget doesn't include any money for the potential cost of new union contracts currently under negotiation.

Bob King, Knowles' press secretary, said the move may have made a nice press conference, but carried no real weight.

``They seem committed to changing the paper, the bill, but that doesn't change the needs of our children,'' he said. ``I fail to see the significance of this.

``They're concerned about the starting line. I think we're more interested on where the finish line is.''

Though the governor signed the 2000 budget, which the GOP will use as its foundation for 2001, the spending plan included some items such as new juvenile detention beds that will need additional staff funding to be useful. Other programs, King said, were underfunded in the budget with the GOP knowing more cash would be needed.

Rep. Ethan Berkowitz, an Anchorage Democrat and House minority leader, said the majority was signaling its intent to stop in time. He said it appeared the GOP agenda had suffered from the sort of computer glitch some feared would come with the year 2000.

``Using last year's budget must be a cornerstone of the Republicans' do-nothing plan,'' he said. ``Clearly, there is a sort of Y2K problem. I would have hoped their dates would have rolled over.''

Mulder said the move was in response to the message he heard from the Sept. 14 special election. Then, some 84 percent of Alaskans rejected an advisory measure asking if it was time to spend some earnings of the Alaska Permanent Fund to help pay for state government.

``This approach is a perfectly appropriate and responsible reaction to the Sept. 14 vote,'' Mulder said.



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