1999-01-21                     Senate Journal                      Page 0044
SB 30                                                                        
SENATE BILL NO. 30 BY THE SENATE RULES COMMITTEE                               
BY REQUEST OF THE GOVERNOR, entitled:                                          
                                                                               
An Act making appropriations for the operating                                
and loan program expenses of state government, for                             
certain programs, and to capitalize funds; making                              
appropriations under art. IX, sec. 17(c), Constitution                         
of the State of Alaska, from the constitutional                                
budget reserve fund; and providing for an effective                            
date.                                                                          
                                                                               
was read the first time and referred to the Finance Committee.                 
                                                                               
Governors transmittal letter dated January 20:                                 
                                                                               
Dear President Pearce:                                                         
                                                                               
The reality of current record-low oil prices dictates decisive action          
to balance Alaska's budget.  But we learned from the oil price crash           
of the mid-1980s that it is also essential to maintain economic                
stability. I believe a responsible FY 2000 budget must:                        
                                                                               

1999-01-21                     Senate Journal                      Page 0045
SB 30                                                                        
Strengthen, build and diversify our economy;                                  
Reduce costs through efficiencies, consolidations, new                        
technology, user pay, and, where appropriate, service                          
reductions; and                                                                
Continue progress in improving our schools and the well                       
being of our children.                                                         
                                                                               
My proposed $2.3 billion FY2000 budget cuts $13.5 million from                 
FY1999 -- absorbing critical increases such as $23.6 million for               
schools and the University, $15 million for corrections and public             
safety, and millions in inflation costs.                                       
                                                                               
The operating budget uses welfare reform savings and a new,                    
sustainable source of revenue to continue commitments we jointly               
made last year in child health and protection.  The recent settlement          
with the tobacco industry will bring in $22 million next year and              
$23-28 million each year until at least 2025, avoiding an additional           
draw on the Constitutional Budget Reserve.                                     
                                                                               
In the long term, these initiatives will help balance Alaska's budget          
by strengthening our economy and averting costly social problems.              
It is therefore consistent with my proposal for Alaskas Balanced               
Budget Plan.                                                                   
                                                                               
As we look at ways to reduce state spending, it's important to                 
remember that even with a $1,500 dividend, spending in FY2000                  
would be $186 less per person than in FY1979. And according to                 
figures released last month by the National Association of State               
Budget Officers, Alaska is alone in all the states in cutting its              
general fund budget over the past four years.  In fact, the average            
four-year increase among the states is 21.7%, while we cut our                 
budget 2.8%.                                                                   
                                                                               
                                                                               

1999-01-21                     Senate Journal                      Page 0046
SB 30                                                                        
We must ensure the FY2000 budget is consistent with a plan that                
balances the general fund budget before our Constitutional Budget              
Reserve is depleted.  I pledge to work cooperatively with you and              
local government officials to involve the public in the hard decisions         
ahead.                                                                         
                                                                               
					Sincerely,                                                                
					/s/                                                                       
					Tony Knowles                                                              
					Governor