1998-01-16                     Senate Journal                      Page 2212
SB 229                                                                       
SENATE BILL NO. 229 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 received January 15:                              
                                                                               
Dear President Miller:                                                         
                                                                               
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.                    
                                                                               
                                                                               

1998-01-16                     Senate Journal                      Page 2213
SB 229                                                                       
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 $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