House, Senate still divided on bond proposals

House GOP wants tobacco money; Senate seeks state earnings

Posted: Sunday, April 23, 2000

The House and Senate passed parts of their competing bond packages last week, but the fundamental difference between the two Republican majorities remains.

How much to spend for a collection of school, harbor and road projects is less of an issue at this point than how to pay for them, according to House and Senate Republicans.

The House wants to use a steady stream of money coming from the state's settlement with tobacco companies to pay for $270 million of projects. The proposal would not need voter approval.

The Senate wants to use bonds backed by Alaska to pay for $440 million of capital spending, including about $239 million for school projects and $169 million for transportation projects.

Though the measures have been approved, the bills that authorize money for the projects have not been voted on by either the House or the Senate.

Sen. John Torgerson, a Kasilof Republican and co-chairman of the Senate Finance Committee, is the point legislator for his side of the Capitol. He wants to use $400 million from the Constitutional Budget Reserve to set up a sub-account inside the earnings of the Alaska Permanent Fund to back the bonds.

That way, he said, Alaskans will have to vote to allow the state to take on debt for the projects in the two measures approved by the Senate. But some of the senators in his own caucus, he said, don't like the idea of using the Constitutional Budget Reserve.

``The Senate is not afraid to let Alaskans vote on the issue,'' Torgerson said.

The House isn't either, said Anchorage Rep. Eldon Mulder. The co-chairman of the House Finance Committee is the Republican point man for bonds in the House.

He wants to use the promised tobacco money to pay for the package for a few reasons. Chief among them, he said, is to spread the risk of the tobacco money going dry with the companies and people who buy the bonds. Ongoing lawsuits may have the potential to bankrupt tobacco companies and lower future payments.

``The package we have is responsive and affordable,'' he said.

Both the House and Senate passed measures listing what projects would be built and how they'd be funded. Neither body, however, has approved bills to actually fund the projects.

Anchorage Democrat Rep. Ethan Berkowitz said members of his party have made it pretty clear what they want included. Neither of the GOP proposals do enough for schools, he said.

Presented in the form of an amendment on the House floor, Democrats there want to fund all the $219 million of major repair projects on the Department of Education's priority list. Also, the top 10 needed new schools would be funded for $154 million. With university repair, harbors and other projects proposed by Democrats, the package is $433 million.

``It's a very reasonable package,'' Berkowitz said.

Annalee McConnell, budget director for Gov. Tony Knowles, said the Legislature isn't making much sense by not taking care of the school projects now. With oil prices high, she said, the state's in a good position. Money spent now to fix a leaky roof, she said, could mean many millions more saved not having to build a new school when that leaky roof results in extensive structural damage.

``It makes no sense not to do the major maintenance list,'' she said. ``It's not a question of whether we are going to do it. It's when.''

The House GOP's proposal, House Bill 281, passed the House in partisan fashion - 25-13 - on Friday, but it could get another vote early in the coming week.

The two measures that make up the Senate GOP's proposal have been sent to the House. The school bond bill, Senate Bill 310, passed 12-8. The ports and transportation bond bill, Senate Bill 311, passed 11-9.



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