Bond packages divide GOP

Decisions would affect highway funds, construction of schools

Posted: Wednesday, April 19, 2000

Republicans in the House and the Senate are both pushing bond package proposals, but they're pushing in different directions.

The GOP majorities in the two bodies aren't in agreement on how big a package should be or how it should be paid for.

``We fundamentally disagree with each other,'' said Rep. Eldon Mulder, an Anchorage Republican. ``I don't think that's unusual.''

That disagreement, he said, extends to the state's operating budget, and how to fund the University of Alaska and school construction. School construction is the key function of the bond package the House Finance Committee, which Mulder co-chairs, has put together.

The House package uses the promise of tobacco settlement money to raise $270 million of bond revenue for school, harbor and university public-works projects. Included is about $7 million for Juneau, including school repairs.

Senate Finance Committee members stayed up to nearly 1 a.m. today to rework and move out their own revised bond package. The Senate package was once nearly identical to the House version. Now, it's bigger.

The Senate Finance proposal, stretching over four bills, would fuel $430 million of projects, including schools, university work, harbors and something new -- a host of highway construction and repair projects worth about $167 million. Juneau projects include what's in the House package, plus $650,000 for Old Dairy Road -- the only local work in the highway portion of the package.

Rather than using traditional, government-backed bonds or the tobacco money approach, the Senate committee moved on a proposal that tries something new. Sen. John Torgerson, a Kasilof Republican, put in a mechanism by which a $400 million piece of the Constitutional Budget Reserve would be put into an account inside the earnings reserve portion of the Alaska Permanent Fund. From there, the money would earn interest to pay off bond debt. After 15 years or so, the cash would be put into the principal of the permanent fund, Torgerson said.

``It's pretty simple,'' Torgerson said. ``It's simple in terms of its approach. It's complex in terms of its legality.''

Torgerson said the Senate GOP caucus wants a proposal Alaskans will vote on -- not a requirement of the House Finance proposal -- and one that won't put a hole in state financing in the future. Also, he said, the money from the budget reserve will eventually go into the permanent fund.

He said the added transportation projects help bring geographic balance to the proposal.

``We're just building a few roads,'' Torgerson said. ``They're roads in Anchorage, Fairbanks . . . scattered all over the place.''

Bob King, spokesman for Gov. Tony Knowles, said the administration still prefers a bond package offered by Knowles at the start of the legislative session. However, Torgerson's idea is getting a close look, King said.

Sen. Al Adams of Kotzebue, the only Democrat on the Senate Finance Committee, said Torgerson's plan is illegal.

He also said majority Republicans in the Senate and their GOP counterparts in the House seem to be working off different pages in different books written in different languages.

``What you have is a problem,'' Adams said. ``You don't know which way each side is going. It's railroad cars running at each other.

``There is going to be a train wreck.''

House Finance Committee co-chairman Mulder said there probably won't be a legislative train wreck over the bonds, but he said there isn't much hope for Torgerson's plan in the House. Because it relies on money from the Constitutional Budget Reserve, it needs a three-quarters vote. To get that in the House, Mulder said, the bond package would probably have to get a whole lot bigger.

``It just becomes a Christmas tree,'' Mulder said. ``You have to buy 30 votes in it, and that gets ugly.''

Though some minority and majority members in the House are annoyed with the geographic distribution of projects in the House bond proposal, there seems to be support for it, Mulder said.

He expected the House bond package to move onto the House floor in a day or two. The Senate version was on the Senate calender for today, though it may not be taken up immediately.

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