Capital budget may become next battle

House, Senate standoff shows no signs of abating

Posted: Monday, May 16, 2005

The Alaska House on Sunday continued to stall voting on two bills while Republican leaders dismissed a proposal to use an Alaska Permanent Fund account to pay for hundreds of millions of dollars in capital projects.

The standoff between the House and Senate showed no sign of abating, with leaders on both sides saying they are prepared to wait out the full 30 days of the special session.

The special session, which began Wednesday, so far has cost the state an estimated $150,000. If both sides dig in and wait until the last day, June 9, it will cost about $900,000.

The House met Sunday after canceling its floor session the day before, but bills on changing the state's workers' compensation laws and retirement systems did not reach the floor for a vote.

With prospects of the House rejecting the Senate's and the governor's two favored bills - retirement and workers' compensation - and slashing the capital budget, Senate President Ben Stevens, R-Anchorage, said he will continue to hold the budget.

"We're reluctant to give up the capital budget because they have not only the last stroke of the pen, but the last hack of the ax," Stevens said.

It is not certain whether there are enough votes in the House to pass the retirement bill, a conversion of the state retirement systems for future public employees and teachers from traditional pension plans into individual investment accounts. The vote also appears split on the workers' compensation bill meant to keep employer rates from rising.

The House-Senate differences on the capital budget could be the next issue of contention.

A capital budget plan brokered by Jim Clark, Gov. Frank Murkowski's chief of staff, was floated Sunday to House Republican majority members.

The plan would fund part of the Senate's capital projects proposal, which House members say is too bloated, with bond debt paid off with earnings from an untapped account within the Alaska Permanent Fund.

House Finance Co-Chairman Kevin Meyer, R-Anchorage, said the Senate's proposal calls for $850 million in general fund spending, which is about $200 million more than what he would like to see.

Clark's capital budget plan would use $200 million in 2005 oil revenue surplus money, $300 million from next year's projected revenue surplus, $140 million from the Constitutional Budget Reserve or the new education fund and $340 million with bond debt from the permanent fund account, known as the Amerada Hess account, Meyer said.

The Amerada Hess earnings would pay for school construction projects originally in a bill by Stevens. When that bill died in the House Finance Committee, the Senate included the projects in the capital budget to be paid for out of the general fund.

The Senate on Sunday rescinded its previous vote on the capital budget to send it back to the finance committee. The committee planned to strip the school projects from the bill and include them in the governor's Amerada Hess bill from earlier in the session.



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