1996-03-11                     House Journal                      Page 3064
HB 541                                                                       
I have purposefully chosen general obligation bonds as the primary             
vehicle to finance expansion for two reasons.  First, with revenue             
declining, it is more feasible to pay for these projects over a long term      
than it would be to fund them with direct capital appropriations.              
Second, the Alaska Constitution requires general obligation bonds to           
be submitted to the voters of the state for ratification and I strongly        
believe that such a substantial financial commitment deserves to be            
subjected to a vote of the people.                                             
                                                                               
I have taken the additional step of including the costs of the first full      
year of operations once all of the projects in the  ballot proposition are     
completed.  We expect an estimated average annual debt service                 
payment of $13,423,000 through 2013 if the bonds are sold at par.              
The Department of Corrections estimates that the operating costs for           
the first full year after all these projects are completed will be             
approximately $28,000,000.  Cost reductions made possible by the               
projects, such as closure of the 6th Avenue jail in Anchorage and the          
return of 206 prisoners from a contract facility in Arizona, are               
expected to produce a net operating cost of $18,700,000 for these              
facilities in the first year that all of them are in use.                      
                                                                               
If approved by the voters, this commitment will then become an                 
integral part of the state's long-range financial plan.  I urge your           
support for this bill.                                                         
                                                                               
                                                                               
							Sincerely,                                                              
							/s/                                                                     
							Tony Knowles                                                            
							Governor                                                                
                                                                               
                                                                               
                     CONSIDERATION OF THE DAILY CALENDAR                     
                                                                               
                        SECOND READING OF HOUSE BILLS                        
                                                                               
HB 478                                                                       
The following was read the second time: