Bucks back in state budget for arts, radio

University, other funding still up in the air

Posted: Tuesday, March 07, 2000

Squeaky wheels got greased in the House Finance Committee.

State funding for the arts, public radio and domestic violence programs were restored Monday as lawmakers amended the House's version of the state's operating budget for the 2001 fiscal year, which starts July 1.

Committee Co-Chairman Rep. Eldon Mulder said amendments to the House's spending plan were approved largely because the whole operating budget is now on the table. The proposed cuts, he said, were made in subcommittees that concentrated on departments. Now, the full committee can weigh each item against all the other programs provided by the state.

Mayors cling to hope that smaller cuts will survive

Cities and towns across the state are holding their breath.

The state budget, under construction in the House, includes $28.5 million for two municipal aid programs that many considered likely budget-cutting bait. For now, however, it looks like the revenue sharing and municipal assistance programs will be cut by about $3.4 million, far less than the nearly $17 million that was widely discussed, even presumed, during the legislative interim.

Kevin Ritchie, executive director of the Alaska Municipal League and the Alaska Conference of Mayors, said inclusion of the municipal aid programs in the House budget is encouraging. But he said mayors and city councils should not start spending the money.

``I don't think it's something people can count on yet,'' Ritchie said. ``We hope it holds. We think it will hold, and maybe even improve. We've got quite a bit of support from quite a broad array of Legislators because of the impacts.''

Last year's cut of near $16 million, he said, caused Alaska municipalities to cut services, take more money from residents and drain savings accounts.

``In bigger communities, it was taxes and one-time reserves,'' Ritchie said. ``The smaller communities, which literally don't have a tax base ... They're really facing some serious declines in basic public safety service. When you need an EMT (emergency medical technician), they may not be there.''

Rep. Eldon Mulder, an Anchorage Republican and co-chairman of the House Finance Committee, said the $3.4 million cut contained within the House's budget is ``modest.'' The near 10 percent cut is far less than the 50 percent cut lawmakers discussed last year and that a lot of officials had come to expect this year.

``It's certainly less than the $17 million reduction many people thought would occur,'' he said.

Rep. John Davies, a member of the Finance Committee and a Fairbanks Democrat, said the two municipal aid programs are far more secure than they were not too long ago. In the initial spending plan presented by Mulder, all the money for revenue sharing and municipal assistance, then $48 million, was gone.

``Last year at this time, the House plan was to zero it out,'' Davies noted.

The message sent by GOP budget-writers after two-thirds of the cut was restored, he said, was that the program would be cut in half this year and then eliminated in the budget for the 2002 fiscal year.

Whether that message was a deal, an agreement or just a talking point has been disputed by Republicans this session. But it was clear to Davies last year that GOP budget-writers were on board with the idea.

``Nobody voted on that, but it was a pretty commonly assumed intent,'' Davies said.

Mulder said lawmakers decided to limit this year's cut to municipal aid after listening to a ton of comments on the programs. Also, fears cities would lose their ability to raise money lost to the cuts helped keep money flowing to Alaska's incorporated communities. An initiative slated to appear on this fall's ballot would cap the amount of property tax local governments could charge.

Sen. Sean Parnell, an Anchorage Republican and co-chairman of the Senate Finance Committee, said it's too early to say what the final funding level will be for the two municipal aid programs. The Senate will craft its version of a state operating budget after the House passes its funding measure.

The Senate will begin its work on the budget with the House funding level.

``That's our starting point,'' Parnell said. ``I don't anticipate it moving dramatically one way or the other.''

That starting point will mean about $191,200 less for Juneau, which received $1.6 million for the current fiscal year, according to Bill Rolfzen of the state Division of Municipal and Regional Assistance. In Anchorage, the proposed reduction would mean some $1.3 million less for the state's biggest city. On the lower end of the scale, the current House budget would cut $1,025 from the little town of Akhiok on the west coast of Kodiak Island. Rolfzen said the House's relatively small cut to state revenue sharing and municipal assistance is a positive development.

The size of the reductions for big towns will have an impact, but so will the cut to Akhiok, which has a far smaller budget to begin with.

``It's all relative,'' Rolfzen said. ``To them, it's pretty significant.''

Juneau Mayor Dennis Egan said the city has planed on losing $1 million from the state in the 2001 fiscal year - assuming that the $17 million state cut was in the offing. A $200,000 cut, he said, would still likely mean reduced city services, but, given the alternative, he'll take it.

``It's not good news but it's a lot better than we expected,'' Egan said. ``No cuts are good news. That's the problem. Municipalities have been cut since 1986. When you take the cumulative impacts, it's a serious reduction.''

``When you open it up, and put it against everything else, it gives me and everyone else more flexibility,'' Mulder said.

Among the budget cuts identified as onerous during a 12-hour public testimony session Saturday, the arts, public radio and domestic violence funding got a lot of attention. Other items, such as the University of Alaska's budget request, have yet to be addressed in the budget amendment process.

The $335,000 put back into the Council for Domestic Violence and Sexual Assault brings the

agency's total almost back to the $9 million it got for the current budget year. The funds came from a federal pool of money made available via welfare reform legislation.

That same pot of cash was used to replace general fund money initially aimed at Alaska's Head Start program, which was diverted to replace all but $600 of the $75,600 a subcommittee cut from the Alaska State Council on the Arts' $1.2 million budget from last year.

Public radio, which had been looking at a $330,000 cut to its $2.6 million state grant fund from last year, is now looking at a $130,000 cut.

The policy-setting commission for Alaska's public stations will figure out whether broadcasters in urban or rural Alaska will feel the pinch next year, said Bill Legere, general manager at Juneau public stations KTOO-FM and TV. At the same time, he said, the budget is a long way from set.

``I don't think any station grant is secure at this time,'' Legere said. ``The Public Broadcasting Commission is going to have to look at all the station grants and decide how to allocate the cuts when the final budget is passed.

``We still have to see what happens in the Senate.''

The Senate will take up the operating budget and its $2.1 billion of general fund spending after the House finishes. Mulder said he plans on having the budget on the floor of the House when lawmakers return from a mid-session break March 15.

Rep. Ben Grussendorf, a Sitka Democrat who sits on the Finance Committee, said the minority's job at this point is to fix what's wrong with the GOP-led majority's 2001 spending plan.

``Our role, basically, is to make sure there aren't any mistakes and the funding is available,'' he said. ``The big issues are still down the road there.''

Those big issues, he said, include how much money the University of Alaska will get, how public school programs will get funded and what the Legislature is going to do about almost $24 million in labor contract cost increases that are on the table.

Grussendorf said the money maneuvering he's seen in committee so far points to a rising possibility that lawmakers are going to have to add to state spending when they come back next session. Some programs, he said, appear to be underfunded, which means they'd be the subject of a supplemental budget request next year.

He said it looks like the GOP majority is setting up an ``escape valve,'' just in case its self-imposed $30 million in general fund cuts don't materialize.

Mulder said he didn't share Grussendorf's concern about supplemental spending being needed next year. His intention, he said, is to keep next year's supplemental budget as low as possible. So far, he said, the committee has stuck with that intention.

``I think we've done a really good job,'' he said. ``Better this year than the last.''



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