House approves stimulus funds with 40-0 vote

Palin continues to assert federal money would be a burden on Alaska in the future

Posted: Sunday, April 12, 2009

The Alaska House on Friday unanimously backed spending $450 million in federal stimulus money on public schools, expanded unemployment insurance, new public safety officers, home weatherization and other programs.

Their 40-0 vote came hours after Gov. Sarah Palin again asserted that the federal money would be a burden on the state.

House Finance Committee Co-chairman Mike Hawker, an Anchorage Republican, said he had similar concerns when the American Recovery and Reinvestment Act was enacted by Congress in February. He arrived at a different conclusion after studying the measure.

Hawker said the benefits of investing the money into the Alaska economy, "doing it this year, doing it quickly and doing it soon," outweighed any residual concerns.

"Over that time, I've sometimes begrudgingly and sometimes, quite frankly, slowly and reluctantly, acknowledged that the facts as they bore out did not support those earlier anxieties," he said.

Palin and lawmakers have been at odds over whether to accept all of the $930 million expected to flow to state.

Palin took many by surprise in mid-March when she announced that she would accept only 69 percent of the money, including transportation projects and a hike in the federal Medicaid match.

Though Palin had earlier indicated she was leery of accepting money that might have strings attached, legislators were shocked at the extent of the items left off her list, including education and public safety money.

Some suggested Palin was playing to her conservative base around the country at the expense of the state's interests.

Over the next several days, her staff assured lawmakers that nothing was off the table and Palin was simply launching a public discussion to identify acceptable spending that would not burden the state financially in future years once the stimulus money was gone.

With the public process near completion, Palin still has not said what she will accept.

"The worst thing that a governor can do is be part of this problem of growing the national debt and not doing all that they can to eliminate that problem," Palin said at a news conference Friday. "But, having said that, understanding reality, our lawmakers - both bodies - have gone around me to resolve to accept the stimulus package dollars anyway. So we deal in reality."

Both the House and Senate have passed resolutions saying they would accept any money that Palin does not ask for but the governor has the last word. Palin could exercise her line item veto or direct commissioners not to apply for the money.

Palin said Friday the most "prudent and fiscally conservative thing to do" would be to replace some of the draw on the state treasury with federal stimulus dollars, even though it's prohibited for many of the programs.

Palin said her office had identified about $250 million that fit that criteria.

Asked for specifics, Palin listed $137 million that is being used to supplant a portion of the state Medicaid match - money that she had already indicated in March that she would accept.

Lawmakers' review of the stimulus package included three main areas of concern for the administration: $170 million in federal stimulus funding for schools, $56 million for energy programs and $15.6 million for unemployment and job centers.

Hawker said concerns that the money would come with burdensome federal requirements are not realistic.

"Where the bill appeared to have restrictions, the federal budget office has been providing relief and interpretation that, if anything, have erred on the side of state rights, state interests and state flexibility," he said.

Rep. Les Gara, D-Anchorage, said the money comes at just the right time.

It would provide job training in a time when unemployment is at 8 percent, provide schools with help in lowering the state's 40 percent dropout rate, or help a disabled person to build a wheelchair ramp, he said.

"We looked for federal strings and they don't exist," he said. "We looked for threads and they don't exist."

Hawker said lawmakers might have concerns about the merits of stimulus spending as a concept, and whether the money is burdening future generations with massive national debt or providing a jump-start to the nation's economy.

However, the vote was not a referendum on the merits of the plan, he said.

"If the state of Alaska does not accept it, this money will not be returned to the federal treasury. This money will be divvied up by other states and consumed by another state," he said. "That's money that Alaskans, in paying their federal income taxes, will have paid for."

The bill next goes to the Senate, where majority lawmakers also have signaled their willingness to accept the money. The stimulus transportation projects, meanwhile, are included in the capital budget, currently in the Senate.



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