Murkowski: State needs to rely on less aid

Senator asks Legislature to throw weight behind oil development and tax breaks

Posted: Thursday, March 31, 2005

Sen. Lisa Murkowski on Wednesday warned Alaska legislators that federal aid to the state is waning.

The junior Republican senator also used her Juneau address to urge the Legislature to throw its weight behind oil development and tax breaks for a North Slope gas pipeline.

After nearly 50 years of statehood, Alaska should start thinking about weaning itself from its reliance on federal funds, she said.

"As Congress works to reduce the federal deficit and we face competing funding priorities, we must recognize that the federal government will play less of a role in Alaska's budget in the years to come," Murkowski said.

The federal deficit has reached a record $412 billion this year, with rising health costs, large tax cuts and military spending playing lead roles.

Senate Minority Leader Johnny Ellis, D-Anchorage, said Murkowski's warning is likely an honest assessment but starkly conflicts with her 2004 Senate campaign message. "We were supposed to elect a Republican team in order to keep the gravy train running," he said.

"What Murkowski could really do to help is talk (President Bush) out of policies that are going to bankrupt Americans," Ellis said.

Murkowski said Alaska's requests for federal funds need prioritizing, with a greater emphasis on improving Alaska's infrastructure, health and education. "There is a federal role in the bigger ticket items," like roads and bridges, she said.

Murkowski also said the state faces a quandary over Medicaid. Twenty percent of Alaskans qualify for Medicaid coverage, compared to the national average of 12 percent. But the state is poised to lose more than $50 million to $70 million in Medicaid appropriations when its advantageous federal match rate, set at 57.5 percent, expires in October.

House Speaker John Harris, R-Valdez, said loss of those funds would have dire consequences for Alaska's budget. "It's going to be a significant increase to our budget," he said.

Murkowski said she's asking for a two-year extension on Alaska's Medicaid match rate. "In light of overall budget restraints, this will be a significant commitment to Alaska," she said.

Murkowski elaborated on her comments about reductions in federal aid for Alaska in a news conference after her speech.

In general, Alaskans have been in a very enviable position because of Sen. Ted Stevens' past chairmanship of the Senate Appropriations Committee, she told reporters.

"So successful that we have communities and individuals coming to the federal government for literally everything," Murkowski said.

Murkowski declined to single out any community or individual who had made an unreasonable request this year. She said that in the 70 pages of appropriation requests she received this month, some communities asked for "everything from A to Z."

Sen. Ralph Samuels, R-Anchorage, said reduced federal support has been a topic of conversation in Alaska communities for some time. "It's interesting to hear a federal official say it."

Federal funds are still necessary in rural Alaska, he said. "You can't let Western Alaska live in Third-World poverty. We need the infrastructure built," he said.

Harris noted that the state's budget is already spare and that federal funds are critical for a developing state.

But he agreed that the departure of Sen. Stevens from the Senate Appropriations Committee and the upcoming departure of Rep. Don Young from the House Transportation Committee could spell leaner years ahead.

"It may be a while before someone can deliver like they were delivering," he said.

In her speech, Murkowski asked legislators to continue to support oil development in the Alaska National Wildlife Refuge but also said Alaska must recognize that climate change is occurring here, and at least part of it is human-caused.

She said legislation she co-sponsored in Congress offers a comprehensive approach to limiting greenhouse emissions without harming the economy.

But Fairbanks environmentalist Kelly Hill Scanlon, of the Northern Alaska Environmental Center, said that it doesn't make sense to develop the Arctic National Wildlife Refuge when Congress doesn't have a sound energy policy.

"I'm pleased to see that she is acknowledging the evidence of global warming's human causes. We really need a policy that weans us from our fossil fuel dependence," Scanlon said.

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