Governor claims success with PERS, budget

Some lawmakers challenge view that this year's legislative session was fruitful

Posted: Friday, May 27, 2005

Gov. Frank Murkowski touted education funding and changes to the state's retirement systems for new employees as some of the top successes in the Legislature this year at a news conference in Fairbanks on Thursday.

But the contentious session, which went more than two weeks into overtime at a price of about $450,000, was panned as a failure by some lawmakers after the close of the special session Wednesday.

Murkowski said the capital budget approved by lawmakers this year uses about $650 million in state funds. It is one of the largest capital budgets in the state's history and is largely a result of high oil prices over the last year.

Murkowski said the money will be used to build schools, roads and other necessary infrastructure.

Others have said lawmakers spent too much of the oil windfall money and that changes to the retirement system to establish 401(k)-style investment accounts for new employees rather than sticking with the current defined-benefit pension plan will do nothing to reduce the state's $5.7 billion unfunded liability.

House Minority Leader Ethan Berkowitz, D-Anchorage, compared the Senate's spending proposals this year to "sharks in a feeding frenzy."

Berkowitz also has argued that despite the resignation of former Attorney General Gregg Renkes earlier this year, over alleged ethics violations, the Legislature failed to pass a new set of ethics guidelines.

Murkowski said the large capital budget will help knock out the 71 items on the Department of Education's list for major maintenance and construction projects.

"The longer we put off maintenance the more it's going to cost," Murkowski said.

The state's operating budget, which is used for the day-to-day expenses of state government, also jumped to $2.6 billion for fiscal year 2006. That is about $200 million more than the budget approved in 2005.

The capital budget also will use about $57 million from a sub-account within the Alaska Permanent Fund for more than a dozen road construction and maintenance projects.

The money from the so-called Amerada Hess account is not considered when calculating permanent fund dividend checks. It will be the first time the state has used the account for purposes other than managing the account and on legal fees for disputes with oil companies.

Some lawmakers have argued that using the money constitutes a run at the permanent fund without a vote of the people.

Murkowski spokeswoman Becky Hultberg said the decision to use the permanent fund is not a broken promise because it will not affect dividends.

"It's sitting there accumulating without benefiting Alaskans," she said.

When asked about his campaign promise to reduce government spending, Murkowski said Alaska is a young state and must catch up with the rest of the country on establishing its transportation infrastructure.

"We came into the union in '59," Murkowski said. "The railroads were already built up the coast and here we are with one-fifth the size of the United States with virtually no transportation capability by land and a few roads."

Murkowski said he wants to review the budget with his staff before deciding if he will veto any of the projects in the budget. He said he has six reds pens in the desk at his office in Juneau.

"I checked them the other day and they all work," he said.

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