2007-01-22                     House Journal                      Page 0074
HB 95                                                                                                                         
HOUSE BILL NO. 95 by the House 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; and providing for an                                                           
     effective date."                                                                                                           
                                                                                                                                
was read the first time and referred to the Finance Committee.                                                                  
                                                                                                                                
The Governor's transmittal letter dated January 17, 2007, follows:                                                              
                                                                                                                                
"Dear Speaker Harris:                                                                                                           
                                                                                                                                
Today I am transmitting to you my Fiscal Year 2008 operating budget                                                             
bill.  As I have stated previously, I view this bill as a starting point in                                                     
the development of the Fiscal Year 2008 operating budget.  This                                                                 
budget contains new funding for three of my priorities: $48.1 million                                                           
in general funds for local government support, $33.7 million in general                                                         
funds to restore the Longevity Bonus program, and approximately                                                                 
$100,000 in general funds for an additional investigator in the Alaska                                                          
Public Offices Commission.                                                                                                      
                                                                                                                                
As you know, the Alaska Retirement Management Board established                                                                 
the Fiscal Year 2008 retirement systems' rates to include payback of                                                            
the systems' unfunded liabilities of $8.6 billion over 25 years.  Those                                                         
rate increases, of course, have resulted in cost increases to the tune of                                                       
$178.4 million in general funds and $62 million in federal and other                                                            
funds for the Executive Branch, the Legislature, the Court System, and                                                          
the University of Alaska, which are included in this budget.  The bill                                                          
also includes $77.5 [million] for the retirement systems' increases for                                                         
local governments.  Together with the school districts' retirement                                                              
systems' cost increases of $207.4 million in general funds contained in                                                         
my stand-alone K-12 Education budget bill, the retirement systems'                                                              
cost increases account for $463.3 million in general funds, or roughly                                                          

2007-01-22                     House Journal                      Page 0075
13% of the entire Fiscal Year 2008 general funds budget.  My                                                                    
administration will review the retirement systems' data and make                                                                
recommendations for a long-term solution.                                                                                       
                                                                                                                                
One of my goals is to have state government live within its means.  To                                                          
that end, the budget bill includes an unallocated reduction of $150.0                                                           
million in general funds for the Executive Branch.  I look forward to                                                           
beginning the discussion with my new cabinet and with the Legislature                                                           
of where best to reduce the budget.  I certainly hope that you will also                                                        
look at the Legislature's and Court System's budgets to identify any                                                            
cost-savings within those branches of government that might possibly                                                            
be applied against the $150 million target.                                                                                     
                                                                                                                                
I look forward to working with you to develop a cost-effective budget                                                           
for the upcoming fiscal year.                                                                                                   
                                                                                                                                
                                Sincerely,                                                                                     
                                /s/                                                                                             
                                Sarah Palin                                                                                    
                                 Governor"