1999-01-21                     House Journal                      Page 0048
HB 50                                                                        
HOUSE BILL NO. 50 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, 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 20, 1999, appears              
below:                                                                         
                                                                               
"Dear Speaker Porter:                                                          
                                                                               
The reality of current record-low oil prices dictates decisive action to       
balance Alaska's budget.  But we learned from the oil price crash of           
the mid-1980s that it is also essential to maintain economic stability.        
I believe a responsible FY 2000 budget must:                                   
                                                                               
*	Strengthen, build and diversify our economy;                                 
*Reduce costs through efficiencies, consolidations, new technology,           
user pay, and, where appropriate, service reductions; and                      
*Continue progress in improving our schools and the well being of             
our children.                                                                  
                                                                               
                                                                               
My proposed $2.3 billion FY2000 budget cuts $13.5 million from                 
FY1999 -- absorbing critical increases such as $23.6 million for               
schools and the University, $15 million for corrections and public             
safety, and millions in inflation costs.                                       
                                                                               
The operating budget uses welfare reform savings and a new,                    
sustainable source of revenue to continue commitments we jointly               
made last year in child health and  protection.  The recent settlement         

1999-01-21                     House Journal                      Page 0049
HB 50                                                                        
with the tobacco industry will bring in $22 million next year and $23-         
28 million each year until at least 2025, avoiding an additional draw          
on the Constitutional Budget Reserve.                                          
                                                                               
In the long term, these initiatives will help balance Alaska's budget by       
strengthening our economy and averting costly social problems. It is           
therefore consistent with my proposal for Alaskas Balanced Budget              
Plan.                                                                          
                                                                               
As we look at ways to reduce state spending, it's important to                 
remember that even with a $1,500 dividend, spending in FY2000                  
would be $186 less per person than in FY1979. And according to                 
figures released last month by the National Association of State Budget        
Officers, Alaska is alone in all the states in cutting its general fund        
budget over the past four years.  In fact, the average four-year increase      
among the states is 21.7%, while we cut our budget 2.8%.                       
                                                                               
We must ensure the FY2000 budget is consistent with a plan that                
balances the general fund budget before our Constitutional Budget              
Reserve is depleted.  I pledge to work cooperatively with you and local        
government officials to involve the public in the hard decisions ahead.        
                                                                               
							Sincerely,                                                              
							/s/                                                                     
							Tony Knowles                                                            
							Governor"