1998-01-16                     House Journal                      Page 2061
HB 325                                                                       
HOUSE BILL NO. 325 by the House Rules Committee by request of                  
the Governor, entitled:                                                        

1998-01-16                     House Journal                      Page 2062
HB 325                                                                       
"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.                 
                                                                               
                                                                               
The Governor's transmittal letter dated January 16, 1998, appears              
below:                                                                         
                                                                               
"Dear Speaker Phillips:                                                        
                                                                               
I am transmitting my proposed operating and loans budget for fiscal            
year 1999 to you today.  Even with the investments I have proposed             
for Quality Education and Smart Start for Alaskas Children, this               
budget is a $150 million reduction since fiscal year 1995.  In todays          
dollars, per capita general fund spending would be $1,470 less than in         
1979.                                                                          
                                                                               
Last year, my transmittal letter stated: 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.  Administration and Legislature alike can be               
commended for not taking higher oil prices as license to spend.  We            
wisely let the funds remain in the Constitutional Budget Reserve               
knowing at some point we'll have periods of low oil prices.  My                
proposed budget would maintain a Constitutional Budget Reserve Fund            
of well over $2 billion, a healthy level, even if oil prices were to           
remain at $15 for the rest of this year and all of FY99.                       
                                                                               
My budget proposes investing in our children in two ways: improving            
their education and protecting them from harm with our Quality                 
Schools and Smart Start initiatives.  We should do both simply on the         
basis of being responsible leaders and parents.  But they are also cost-      
effective in the long term.  Can better education cut costs?  The              
average prisoner in Alaska has a seventh grade education.  Can the             
crime prevention programs in Smart Start make a difference?  Keeping           
one  youngster  in  a  juvenile  detention  facility  for  one  year  costs    

1998-01-16                     House Journal                      Page 2063
HB 325                                                                       
$60,000.  These investments make good budget sense and they make               
sense for keeping Alaskas families strong and our childrens futures            
bright.                                                                        
                                                                               
I look forward to working cooperatively with you on crafting the               
budget this session, (and, at your suggestion, to the possibility of doing     
our budgets every two years!).  We have much to be grateful for in             
Alaska with our growing economy, healthy reserves, and low debt.               
Lets realize our opportunity and accept our responsibility to make             
these relatively modest but effective investments in our children and          
more good jobs for Alaskans.                                                   
                                                                               
							Sincerely,                                                              
							/s/                                                                     
							Tony Knowles                                                            
							Governor"