1997-01-16                     House Journal                      Page 0083
HB 75                                                                        
HOUSE BILL NO. 75 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; and providing for an effective date.                         
                                                                               
was read the first time and referred to the Finance Committee.                 
                                                                               
                                                                               
The Governor's transmittal letter, dated January 16, 1997, appears             
below:                                                                         
                                                                               
Dear Speaker Phillips:                                                         
                                                                               
I am transmitting today my proposed operating and loans budget for             
fiscal year 1998.  It brings us almost 90% of the way to the level of          
budget cuts I proposed last spring as part of a long range financial plan      
for Alaska: $100 million over three years.  In fact, budget reductions         
since fiscal year 1995 now total more than $138 million and in todays          

1997-01-16                     House Journal                      Page 0084
HB 75                                                                        
dollars, per capita general fund spending is $340 less than in 1979,           
even counting Permanent Fund dividends.                                        
                                                                               
                                                                               
Oil prices have remained high much longer than we anticipated when             
setting our $100 million goal for budget cuts.  This is very good news         
but it is not cause for increased spending.  While it means we do not          
expect a budget gap this year, cuts are still an important part of a           
responsible long range plan.  However, the positive news of the past           
several months does reinforce my belief that we do not need to make            
drastic cuts to budgets and state services next year.  Already, my             
budget has absorbed more than $40 million of increases such as                 
education and other formula programs and additional employer costs.            
Cuts in the tens of millions on top of that will result in substantial         
program impacts.                                                               
                                                                               
                                                                               
Although my bottom line is a reduced budget, I did make room for               
some increased investments for jobs and childrens services.  For               
instance, the budget includes new test fisheries and increased                 
permitting for oil and mining development.  These would be paid for            
by those who will benefit from the new economic activity.  I am also           
proposing to increase our commercial fisheries enforcement efforts             
using criminal fines and forfeitures from those who violate the laws           
that protect our valuable public resources.                                    
                                                                               
                                                                               
My budget fully funds education enrollment increases and pupil                 
transportation with $15 million more than this years general fund              
level.  To address the rising problem of juvenile crime and implement          
some key recommendations of the Youth and Justice Conference, I am             
proposing $2.7 million for new or expanded prevention, intervention            
and youth offender programs.  I am also proposing a $200,000 increase          
in domestic violence funding, funds to add ten Village Public Safety           
Officers for villages which currently have no public safety personnel,         
and Medicaid eyeglasses, hearing aids, acute dental care and                   
rehabilitative therapy for Alaskas poorest seniors and other adults.           
                                                                               
This bill opens the door for discussion of next years budget.  I am            
looking forward to working on it  in a spirit of cooperation with the          

1997-01-16                     House Journal                      Page 0085
HB 75                                                                        
legislature and the public.  I also stand ready to work with you in the        
development of, and commitment to, a responsible long-term financial           
plan which will keep Alaska ready and open for business with a strong          
economy, well-educated citizens and safe, healthy communities.                 
                                                                               
							Sincerely,                                                              
							/s/                                                                     
							Tony Knowles                                                            
							Governor