Bush budget calls for deep cuts in rural Alaska

President would cut development programs by more than half

Posted: Monday, February 14, 2005

FAIRBANKS - The Bush administration's call for drastic cuts in spending on new water pipes, sewers and other projects in rural Alaska had Sen. Lisa Murkowski singing, but the tune wasn't one of praise.

"Well, it's budget time and I have been ... humming that Rolling Stones song: 'You don't always get what you want, but if you try real hard, you just might get what you need,"' Murkowski said as she began her comments at a Senate Environment and Public Works Committee hearing in Washington, D.C.

Under the budget offered by Bush last week, several rural development programs in Alaska would cut by more than half in the coming fiscal year.

According to figures from the White House's Office of Management and Budget, the administration proposes includes proposals to:

• Cut the Denali Commission's funding from $120 million this year to $50 million next year. The state-federal agency, created in 1998, funds a variety of projects but mostly focuses on health clinics and energy projects such as new bulk fuel tanks.

• Cut the federal Environmental Protection Agency's village water and sewer funding in Alaska from $45 million this year to $15 million next year.

• Reduce the U.S. Department of Agriculture's water and sewer money for Alaska from $26 million to $11 million.

These are programs that U.S. Sen. Ted Stevens, R-Alaska, created or greatly expanded during his tenure as chairman of the Senate Appropriations Committee from 1997 to 2004. Stevens is no longer chairman but remains on the committee.

Courtney Boone, Stevens' spokeswoman, said Bush's proposed cuts may not stand.

"The president's budget is a request and clearly there are priorities of members and constituencies that are not always reflected in the president's budget request," she said. "It comes before Congress and we endeavor to meet his request when possible, but we still serve our constituencies."

The hearing last week, when Murkowski revealed her humming, focused on the EPA budget.

"I guess if we had with regard to this program received a small increase or no increase at all, like so many of the other domestic discretionary programs have, I could understand," Murkowski told EPA Acting Administrator Stephen Johnson, "but the two-thirds cut of the money EPA is spending to really alleviate Third World conditions that remain in so many of our Native villages I think is something that we really need to closely scrutinize."

Johnson said the village water and sewer program cuts were prompted in part by unflattering reviews from the agency's inspector general and others.

The inspector general's report, issued in September, said the EPA awarded $232 million to the Alaska Department of Environmental Conservation from March 1995 through July 2004 for the Village Safe Water Program. The money went through the EPA's Region 10 office in Seattle.

The report mostly focused on the lack of any overall plan for the grants and the lack of any specific goals or ways of measuring progress.

EPA managers apparently assumed that project managers and grant specialists were doing the oversight work, the inspector general report said. They weren't, it stated.

"There had been no documentation (e.g. telephone calls, e-mails and onsite visits) in the grant management or project officer files since 1999 of any milestones, progress evaluations or follow up on the grant status," the report said.

An auditor for the Alaska Legislature in January 2004 also found problems with the program, the inspector general noted. The auditor found evidence of excessive pay to three onsite managers, one project that seemed more designed to serve a subdivision than address health problems, and excessive costs on various jobs.

Murkowski disputed whether the lax oversight had caused any serious problems.

"It's not an experimental program that doesn't have clear results," she said.

In 1995, 51 percent of village homes had running water and sewer service, she said. In 2003, the latest figures available, 72 percent had such service.

The state is on track to bring water and sewer to its list of communities within three years, Murkowski said.

The alternative is the honeybucket, she said.

"They're 5-gallon buckets where people put their waste," she said. "The only way you can dispose of that waste is to walk out your front door and walk down to a community central disposal or down to the lagoon. You slop the stuff on the ground. The kids and the dogs. This is happening in this century in the United States, in my state."

Murkowski urged the EPA and the state to work the oversight issues. "But let's not penalize the Alaska Natives that are living in this village," she said.



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