Governor hacks at state budget, adds to his own

Posted: Sunday, February 29, 2004

Gov. Frank Murkowski's bare-bones budget for next fiscal year cuts state jobs and some social services across the state while increasing spending in his own office.

Murkowski is seeking $1.5 million more in general fund spending for his office and its 76 employees in the fiscal year that begins July 1.

It is a 21.9 percent increase from the current year's budget that administration officials say is necessary to pay for increased employer costs.

Murkowski chief of staff Jim Clark defended the increase as a necessary expense that isn't as dramatic when the numbers are examined.

Two additional staff members were added when the Department of Community and Economic Development's trade office was downsized and moved into the governor's office. Along with that came funding for the positions, Clark said.

The governor's office also will pay $340,000 in increased employer costs within the Public Employees Retirement System.

When other internal transfers are considered, the governor's budget is only about 5 percent larger than in the previous year, Clark said.

"The governor can't ask his people to tighten their belts while he is loosening his," said House Minority Leader Ethan Berkowitz, D-Anchorage. "The best kind of leadership is leadership by example."

Earlier this session, Murkowski proposed a lean $2.1 billion general fund operating budget, about $4.4 million less than the current year, despite a hike in state retirement costs and other inflationary increases.

As proposed, it would eliminate an estimated 200 state jobs and make cuts in the departments of Health and Social Services, Natural Resources and Administration, according to analysis by the Legislative Finance Division.

Murkowski has proposed an $8.4 million budget for the day-to-day operations of the governor's office, up from $6.9 million approved for this year.

This increase comes despite $1.2 million in reserve and unspent funds that the governor's office plans to use to offset increased costs.

Under the proposal, Murkowski would set aside about $360,000 in a contingency fund that governors have traditionally kept for unanticipated expenses.

For instance, Murkowski used that fund to pay for a portion of the costs incurred by the Conference of Alaskans meeting in Fairbanks earlier this month.

That three-day meeting cost an estimated $135,000 that will be paid for in part by the governor's office, the Legislature, the Permanent Fund Corp. and Alaska Housing Finance Corp., a spokesman for the governor's office said.

The conference recommended that the Legislature consider using a portion of the $28 billion Alaska Permanent Fund earnings to help close the state's chronic budget shortfall.

Murkowski is proposing the Legislature put on the November 2004 ballot a constitutional amendment to do that. The governor also wants an amendment instituting an effective spending cap on government.

The Republican governor has argued voters need to be assured state government will not grow if permanent fund earnings are used.

Some budget hawks within the Legislature question how the public will react to any growth in government, including the office of the state's top executive.

"Really, it's a matter of public perception and if the public is expected to sacrifice as a result of our policy decisions, at the very least we should demonstrate some fiscal prudence on our part," said Rep. Vic Kohring, R-Wasilla.

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