An overgrown Medicaid program, sky-high fuel prices and a booming prison population are just a few of the costs that drive a whopping $294 million spending increase sought by Gov. Frank Murkowski to supplement this year's budget.
The governor's supplemental spending request from the state treasury is almost a 10 percent bump over the $3.1 billion in general-fund spending the Legislature approved for the current fiscal year, which ends June 30.
The request brought immediate condemnation from lawmakers on both sides of the aisle who say state spending is growing out of control in this time of high oil prices and budget surpluses.
"There's this sense that we're just rolling in money," said Senate Finance Co-Chairman Gary Wilken, R-Fairbanks. "We're doing OK this year, but we're whistling past the graveyard. It doesn't have to go south very far for us to be in trouble."
The Republican governor has filed three bills that ask for $164.6 million in state money to recoup rising and unanticipated costs by public agencies since last July.
"If we want to continue this level of service, this is what it's going to cost," said Cheryl Frasca, Murkowski's budget director.
Plus, Murkowski submitted a separate bill to spend $129.5 million in general-fund money for public works maintenance and construction projects on top of the capital projects the Legislature approved last year.
Those projects are part of the governor's plan for spending the state's expected $1.2 billion revenue surplus this year, Frasca said.
Under his plan, the rest of the surplus would be spent on education funding for next year and as a down payment on a North Slope natural gas pipeline.
Lawmakers' initial reaction to the supplemental requests was sticker shock.
"They're big, they're unusual and they're unsustainable," Wilken said. "We'll take them apart and put them back together."
Large supplemental budget requests demonstrate inconsistency and inaccuracy in budgeting, said House Minority Leader Ethan Berkowitz, D-Anchorage.
It raises questions about the Murkowski administration's fiscal discipline, "especially given the size of last year's budget, that we're adding supplementals that are approaching $300 million," said Berkowitz, a candidate for governor.
Frasca responded by saying legislators should look at each request.
"You don't see what we said no to," she said. "We try to do the best we can to manage the dollars we've got. "
The spending request comes on top of Murkowski's budget plan for next year. At $3.6 billion in general-fund spending, the proposal is an increase of nearly $500 million over this year.
The governor's bills are separated into regular supplementals, fast-track supplementals and "faster-track" supplementals. The faster-track items would mainly cover increased fuel and energy costs to residents and state operations, such as the Alaska Marine Highway System.
But it also includes $6.4 million for the governor's office and the Department of Law for work on a North Slope natural gas pipeline, a $20 billion project being negotiated with three oil producers.
Frasca said the Murkowski administration would like the Legislature to pass that request before next month, and Wilken's committee has already begun working on it.
Medicaid costs and health care for the elderly and disabled represent a major chunk of the spending increase. Medicaid grew larger than expected, adding millions to the cost of a program that the Department of Health and Human Services says was underfunded last year.
The state's prison population is over capacity, which has created the need for more beds and increased flights to Arizona, where Alaska has a contract to house 760 prisoners.
Besides buying additional beds for the growing number of prisoners in Alaska jails, the state Department of Corrections estimates a need for 1,000 beds in Arizona by July.
The supplemental request also includes $4.1 million for the state's disaster relief fund to pay for last year's damage from a Bering Sea storm in western Alaska, flooding and mudslides in Southeast Alaska and flooding in the Kenai Peninsula and the Interior.
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