Legislative budget battles heat up

Posted: Friday, January 25, 2008

Fights over saving and spending this year's state surplus may become as contentious as past years' fights over too little money.

It's looking increasingly like the Alaska Legislature may clash seriously with Gov. Sarah Palin over her budget. The battle this year: Who expanded the budget?

Some legislators are accusing Palin of presenting a budget that looked like it reined in government, but instead had significant spending increases.

In some cases, money was placed in the capital budget instead of the operating budget, or in other separate accounts, making each year's increase seem smaller.

"How much money do we have, and how much are we spending?" asked Rep. Mike Chenault, R-Nikiski, co-chairman of the House Finance Committee.

"That's the real bottom line," he said.

The House and Senate Finance Committees met in a joint session Thursday, along with Legislative Finance Director Dave Teal, to grill Karen Rehfeld, Palin's director of the Office of Management and Budget about the fiscal year 2009 budget proposal.

The committee's goal was to reach a common ground between administration and legislative budget experts on how big the budget actually is, so as to judge its growth rate.

When Palin presented her budget on Dec. 10, she claimed it held the spending increase to 4 percent over last year, but legislators disputed that. The budget was the second during her tenure as governor but the first that was really her own.

Rep. Mike Kelly, R-Fairbanks, cited numbers from Teal, and said the budget had grown closer to 14 percent if off-budget items were also included.

"We can't sustain this," he said.

Rep. Mike Hawker, R-Anchorage, who also serves as chairman of the House Ways and Means Committee, said the state had to improve the truthfulness of its budgeting.

Concern that the budget has been growing too fast in recent years combined with concern that the budgeting process was so convoluted that few citizens, or even legislators, could really understand it.

"A lot of the blame lies with ourselves," said Sen. Lyman Hoffman, D-Bethel, co-chairman of the Senate Finance Committee.

Hoffman said the Legislature itself adopted some of the practices he called "smoke and mirrors" that now obscure the actual size of budget increases.

Hoffman's co-chairman, Sen. Bert Stedman, R-Sitka, said the growth of the operating budget needs to be reined in if the state is to avoid a crisis in future years, but spending cuts to one time expenses in the capital budget won't solve the problem.

"The operating account is the one that's going to eat us," he said. "It's not the capital account," he said.

Palin on Thursday evening released a statement criticizing the legislators' "mischaracterization" of her budget.

"We fundamentally disagree that spending is higher than reported, due to some committee members' arguments over which column the funds are in," she said.

Stedman said the last two years of the administration of former Gov. Frank Murkowski saw "phenomenal" growth in the operating budgets.

One of his counterparts in the House, Rep. Kevin Meyer, R-Anchorage, said the state last year may have allowed the operating budget to grow too much.

"We cut the capital budget quite a bit, and we didn't touch the operating budget," he said.

Rehfeld said she was encouraged that the governor and the Legislature were both working toward the same goal.

"We're very pleased that the conversation here today is about how to save the surplus," she said.

• Contact reporterPat Forgey at 586-4816 or patrick.forgey@juneauempire.com.

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