Legislature reaches for stimulus funds

The Alaska Legislature is moving to go around Gov. Sarah Palin and accept the federal stimulus money she wants to turn down.

The House of Representatives last week voted overwhelmingly to pass a resolution to accept any money available. Only three lawmakers, all typically Palin allies, voted against it. A similar resolution is expected to be heard in the Senate soon.

Rep. Mike Hawker, R-Anchorage, co-chair of the House Finance Committee, said the resolution would not bind the state to accept the money.

"This resolution is necessary to preserve our option to continue to evaluate those program funds that have not been accepted," he said.

Under the American Recovery and Reinvestment Act, known as the stimulus bill, governors have until Friday to accept the money, but it is not clear when the deadline would be for state Legislatures. Leadership in both houses said they needed to act quickly to make sure all options remained open for Alaska.

Palin made state and national headlines with her announcement that she would not be accepting about a third, or $288 million, of nearly $1 billion in federal stimulus money made available to Alaska.

The governor's staff subsequently testified in committee hearings that the announcement didn't mean she was rejecting the money.

Instead, the governor wants to make sure the funds Alaska accepts don't create programs the state can't afford to continue when the extra funds are no longer there, said Karen Rehfeld, director of Palin's Office of Management and Budget.

"Are they going to be targeted and temporary or are they going to create expectations in the future that we will need to backfill with state general funds?" she asked.

That's a concern shared by a number of legislators on both sides of the resolution.

"If in two years we have to continue a program, that's a string," said Rep. Craig Johnson, R-Anchorage, who voted for the resolution.

David Newton, the Juneau School District's director of student services, was grilled by legislators in the Finance Committee about whether Juneau would create new programs with the stimulus money and then demand state money in two years to continue those programs.

Newton said Juneau would spend some of the money on speech and language programs to meet needs it has now.

"We'd have to do that anyway," Newton said. "This just means we can do it without hurting other programs."

Newton said he was unable to promise that the school district wouldn't ask to continue programs in two years if there was still a need.

Rep. Reggie Joule, D-Kotzebue, was sympathetic.

"Districts sometimes get grants that run out, don't they?" Joule asked.

"Yes," Newton said.

Rep. Les Gara, D-Anchorage, said it wasn't fair to tell school districts they couldn't tell the Legislature what their needs were. It was the Legislature's job to assess those needs and decide how much funding to distribute to schools, he said.

Rep. Mike Kelly, R-Fairbanks, raised a similar concern on the House floor, saying he feared accepting money now would grow government in the future. He said he doubted his fellow representatives' ability to eliminate programs once they had been established.

"It's going to be extremely hard for this body to say no," he said.

Kelly voted against the resolution, along with Reps. Wes Keller, R-Wasilla, and Mark Neuman, R-Big Lake. Reps. Beth Kerttula, D-Juneau, and Cathy Muñoz, R-Juneau, voted in favor.

Senate Majority Leader Johnny Ellis, D-Anchorage, said he was hoping to work with the Palin administration to adopt a small change to the state's unemployment insurance rules that could bring an additional $17 million for unemployed Alaskans.

That part of the stimulus bill came with some restrictions, but Ellis said Alaska already changed its laws to comply with those restrictions last year, and can make additional changes that will bring money to the state without tapping the unemployment trust fund.

Negotiations and analysis are ongoing, he said.

"We're thinking we can get to a point where we can all support that legislation," Ellis said.

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