Budget Surplus for What?

The following are a few budget facts I have selected from Senator Kim Elton’s witty and informative January 20th e-mailed newsletter, Off the Record.

$3.6 billion*–That’s the governor’s proposed general fund spending level for fiscal year 2007….

$432 million*–That’s the general fund amount the governor wants to spend on capital projects. The governor’s proposed general fund construction budget is $93 million higher than this year’s GF construction budget, which was far larger than normal.

$1.2 billion*–That’s the expected surplus in the general fund at the end of the current fiscal year. That’s a windfall. It’s more than 10 times what was expected when the legislature completed its spending plan at the end of last session….

$565 million*–that’s the amount of this year’s $1.2 billion windfall surplus the governor proposes to dump into a public education fund as a partial down payment on education funding in the next fiscal year. By using this much of the FY06 surplus to fund some of FY07 education costs, the governor’s proposed FY07 deficit is wiped out.

$400 million*–That’s what the governor wants to spend this year as a down payment on partial state ownership in a gas pipeline….

*Numbers from the legislature’s non-partisan Legislative Finance Division.

Yes, there is suddenly lots of money, but where is the public discussion about using some part of it to help fund Denali KidCare, which takes care of Alaska’s children who have no health insurance coverage? A few years ago the current administration fired all the recruiters who were seeking out these children all across the state. How about using just a little of that money to hire back the recruiters, and to build a fund to expand services? As a public policy priority, where do we place the health of Alaska’s children?


Posted on January 23, 2006, in General, Public Health Policy. Bookmark the permalink. 1 Comment.

  1. Sen. Elton, the former editor of the Juneau Empire, has long been using his “bully pulpit” state-funded newsletter to promote a wide range of his favored liberal viewpoints. While I have had amicable relations with Sen. Elton when we were on the same side of certain issues–and respect his right to launch his “witty and informative” brickbats from his lofty position as an impotent minority of minority Democrats in the legislature–I think he tries to be “too clever” and his efforts ill serve the residents of Juneau. In this case he has dangled a carrot from the Democrat Peanut Gallery to see who can rally the best worthy cause for spending.

    If Alaskans would have wanted to, they could have established universal health care instead of the Permanent Fund give-away program. Hawaii has health care for residents. But as the pipeline was being built, the Democrat majority was busy promising everybody everything. Then the legislature–in collaboration with Republican Gov. Jay Hammond–decided there needed to be some way to protect against spending every penny of Alaska’s oil bounty as soon as it became available. The Permanent Fund is the child of the legislature, and the legislature has the theoretical power to do what it wants to with it, but once the Jeannie was out of the bottle the legislature has been obligated by the voters to “protect” her.

    Gov. Hammond and the Democrat majority in the legislature jumped on the Permanent Fund train for different reasons; Hammond to share the wealth directly, the Democrats because they thought it was going to be hauling money to pay for ever greater government services. They established the PFD program (which was approved as a constitutional ammendment in 1976), got rid of the income tax, put in the longevity bonus, and settled the Molly Hootch lawsuit with a consent decree that built new schools in villages all over the state, among other things. The first PFD checks were signed by Commissioner of Administration, Carole Burger, because Gov. Hammond wasn’t sure how the public would respond to getting government checks for doing nothing! Alaska is a different place today because of how oil development money was invested then.

    Denali KidCare has been a fairly recent politically motivated program implemented by former Anchorage and state Mayor, Tony Knowles, to endear those who used to vote for Democrats but don’t anymore. As a general public policy matter, when Alaska was broke everybody was a Democrat and now that the state is richer than we ever could have imagined back then, Republicans rule. I predict there will now be extensive discussion about all manner of things we can spend our latest resource bonanza on as the appetite for spending by politicians has always been bigger than their stomachs–unless an alternative mechanism is established to keep them from it.

    If this blog is really supposed to be “Alaska’s independent, non-partisan, non-profit think tank” then how about some discussion about how our resource based economy should be stabalized? Is funding Denali KidCare a more valuable investment than paying for the retirement liabilities Alaska has assumed–as the result of so many teachers and public employees coming here long enough to qualify for retirement under TRS/PERS and then going elsewhere to live off their Alaskan Experience while continuing their careers? What about the Percent Of Market Value (POMV) concept endorsed by the Permanent Fund Board to protect the fund and stabalize payouts–does that have any resonance here?

    I realize this isn’t Commonwealth North, but common guys!

    Democratic Sen. Jim Duncan, (Sen. Elton’s Juneau predicessor) was the guy who got those “Retirement Incentive Program” bills passed to R-I-P off the state in the mid- to late-1990s. Alaska teachers with 20 years service–and perhaps University Faculty, too–have retired early to take their experience and ability elsewhere in favor of younger cheaper employees. Then some have come back because they have nothing better to do than work for the state or school district while simultaneously drawing retirement.

    Hey, there’s your Denali KidCare money, ldw! Just tell Sen. Elton to go get it. But, forget about any help from Sen. Duncan– he now works as business manager for the largest union of state employees, ASEA/AFSCME Local 52.

    Donn Liston

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