The end of capital budget favoritism?

Posted: Sunday, July 22, 2007

In 2001, I was a rookie state Capitol reporter watching a legislator have a temper tantrum outside the House chamber.

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A friend and confidante of the legislator explained to me: The legislator was mad - spitting mad because she had to vote for a bill she didn't like and believed was unconstitutional.

"Why the (bleep) would she vote for it?" I asked.

"She has to," said the friend, purely flummoxed by my naiveté.

The bill's sponsor was co-chairman of the Senate Finance Committee. If the legislator voted against the co-chairman's prize legislation, she'd lose her capital projects and her priority bills would get stuck in the committee.

Ultimately, the legislator gave a hand-wringing speech about her misgivings as she voted for the bill, which, after several years of costly litigation, was deemed unconstitutional.

The episode came to mind in recent weeks as I mulled Gov. Sarah Palin's budget vetoes. She vetoed $231 million from the Legislature's approved capital budget - more than Gov. Frank Murkowski nixed in 2003 when the state was facing chronic budget deficits.

Unlike Murkowski, Palin confined her vetoes to the capital budget, leaving intact the legislators' operating budget. The operating budget sets spending levels for ongoing government operations; the capital budget is ostensibly for construction and public works projects and is where lawmakers lodge extra spending for nonprofit organizations and other personal priorities.

Much of the extra spending, often derided as "pork," is for worthy causes. Juneau's haul this year included money for upgrades at a new community art studio, the Glory Hole homeless shelter and upgrades at Gastineau Human Services, a halfway house. All were vetoed, along with the money for several hundred other projects around the state.

"Making these reductions now means that this revenue will be available for vital services for Alaskans in the future," Palin wrote in a June 29 letter of explanation to the Senate president.

Needless to say, the lawmakers in charge of this year's capital budget disagreed. "To say that the budget is irresponsible ignores the fact that there are a lot of infrastructure needs in our state," said House Finance Co-Chairman Kevin Meyer in a press release.

But the issue runs deeper.

Lawmakers of all political persuasions use the capital budget to reward or win favor with particular interest groups and constituencies. This kind of favoritism is a time-honored tradition.

Equally potent is the effect of the capital budget within the Legislature. Because the whole request process is kept secret, it's hard to track exactly who got what, but it's no secret that the capital budget is powerful currency in vote trading. The public in turn often gauges the power and value of an elected official by how much cash they bring home (think U.S. Sen. Ted Stevens).

Palin's June 29 letter references this process:

"The Legislature appropriated 'discretionary' funds to local governments, state agencies and nonprofit organizations for a wide variety of purposes. While I am certain that these funds would provide valuable support or services to specific constituencies, I am concerned that the process does not provide an adequate opportunity for the highest priorities of local communities and the state to receive funding."

Whether Palin really intends to upend the system - and whether she can - is unclear.

Vetoing budget items is one thing, but establishing an even-handed system for distributing millions of dollars statewide is another. Even supposedly apolitical processes such as the education and transportation departments' priority lists spark controversy, and locally generated lists are subject to the same political forces that plague the legislative process.

And lawmakers may fight back. They could withhold support for Palin's priority bills or spending proposals until they extract promises from her about the Legislature's priorities.

But devaluing the capital budget as legislative currency has broad ramifications. The other day someone suggested the new profits-based oil tax needs to be overhauled in a special session so legislative leaders can't use capital money to control votes.

"What capital money?" I asked. The capital budget doesn't hold much cachet if legislators figure Palin will veto their projects anyway. And that may be the whole point.

• Rebecca Braun is publisher and editor of the Alaska Budget Report, an independent publication covering state finance and policy. She can be contacted at

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