Legislature(2001 - 2002)

2002-08-14 House Journal

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2002-08-14                     House Journal                      Page 4063
HB 403                                                                                            
The following letter, dated June 28, 2002, was received:                                            
"Dear Speaker Porter:                                                                               

2002-08-14                     House Journal                      Page 4064
On this date I have signed with line items vetoes the following bill                                
passed by the second session of the Twenty-second Alaska State                                      
Legislature and am transmitting the engrossed and enrolled copies to                                
the Lieutenant Governor's Office for permanent filing:                                              
      CONFERENCE CS FOR HOUSE BILL NO. 403                                                          
      "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."                                    
      Chapter No. 94, SLA 2002                                                                      
      [Effective Date:  See Chapter]                                                                
The FY2003 budget I introduced last December would have held the                                    
line on state services by funding non-discretionary cost increases such                             
as debt service and operations for newly constructed facilities,                                    
contractual obligations, and replacement of federal or other fund                                   
sources no longer available to pay for basic programs.  I proposed                                  
increasing resources to meet certain goals which I believe Alaskans                                 
share:  help schools implement our new quality education standards,                                 
continue to revitalize the university, improve public safety especially                             
for child protection, address homeland security, tackle the huge burden                             
and cost created by alcohol abuse, and create jobs for Alaskans with                                
strategic investments for economic development.                                                     
The legislature's final budget for FY2003 falls far short of these goals.                           
While the legislature did increase funding for K-12 and the university,                             
the amounts were significantly less than I proposed.  The university                                
increase did not even keep pace with non-discretionary cost increases,                              
let alone take the next steps forward.  Public safety levels will actually                          
decline, again because non-discretionary increases were not fully                                   
funded.  Child protection got no additional resources despite                                       
compelling justification for additional troopers for child abuse                                    
investigations and expansion of community programs to ensure that all                               
reports of harm are pursued.  As a result of legislative cuts to public                             
safety and the failure to create an Office of Homeland Security or                                  
adopt most of the recommendations of my Disaster Policy Cabinet,                                    
Alaskans are less safe today than on September 10, before the                                       
terrorism attack on our nation. Gen. Phil Oates, chairman of the                                    

2002-08-14                     House Journal                      Page 4065
Disaster Policy Cabinet, made this testimony to the legislature.                                    
Effective alcohol treatment programs were spared the initial                                        
devastating cuts when the alcohol tax was increased but they were not                               
expanded despite the obvious financial advantage of reducing future                                 
costs such as corrections.  And important job-creating programs from                                
fisheries management to permitting to international trade were cut                                  
Over and over, the majority justified their cuts to basic services --                               
including road and airport maintenance, parks and public safety and                                 
the like -- by saying there wasn't enough money to hold the line on                                 
these services.  But if a lack of money were a reason, why did the                                  
appropriations in some areas of the budget exceed next year's needs?                                
Between the operating and capital budgets, the legislature deposited                                
$14 million more into the debt retirement fund than is needed for next                              
year's debt payments.  There is no legitimate financial reason for the                              
over-appropriation to this account.  Furthermore, last minute                                       
unannounced manipulation of dates by applying most of this                                          
appropriation to the FY2002 budget raises serious questions of                                      
appropriate accounting procedures and attempts to trick the public on                               
spending levels.  The effect of this is to draw more from the                                       
Constitutional Budget Reserve than necessary this year.  Therefore, I                               
vetoed two appropriations in the operating budget which were part of                                
this excessive appropriation:  $1,061,400 from the Tobacco Education                                
and Cessation Fund (page 72, lines 10-11); and the balance of the                                   
International Trade and Business Endowment which is $4,417,500                                      
(page 72, lines 17-19).  I also vetoed the third element of this over-                              
appropriation that is in the capital budget.                                                        
Last year the legislature passed a law creating the Tobacco Education                               
and Cessation Fund directing 20% of the annual tobacco settlement                                   
payments into the fund.  Last year's budget left over $2 million in the                             
fund despite the great need for an aggressive anti-smoking campaign,                                
particularly with teenagers.  I proposed giving a strong shot in the arm                            
to the anti-smoking effort by adding that unused FY2002 amount to                                   
next year's full 20%.  Instead, the majority used over $1 million of                                
tobacco settlement funds to over-stock the debt retirement fund.                                    

2002-08-14                     House Journal                      Page 4066
The International Trade and Business Endowment was established in                                   
statute for the express purpose of providing interest earnings to                                   
support economic development opportunities for the sale of Alaska                                   
goods and services abroad.  Since 1999, the endowment has provided                                  
between 10% and 25% of the annual budget for the state's trade                                      
activities which have produced many examples of increased business                                  
for Alaska companies.  Until this year, it has not been touched for                                 
anything but its statutorily intended purpose.  Ironically, no bills were                           
introduced to repeal or modify the statute creating the endowment.  It                              
makes no sense to eliminate the trade endowment simply to sock                                      
money away in the debt retirement fund for the FY2004 budget.                                       
Unfortunately, a governor's veto pen cannot correct the serious                                     
problems of legislative under-funding even when other areas such as                                 
debt are over-funded.  Numerous mandated services such as formula                                   
programs will require large supplemental appropriations and the                                     
legislature has been clearly informed of these deficiencies.  And                                   
despite the repeated pleas of my administration and the public, the                                 
legislature refused to plug gaping holes in their budgets for                                       
transportation, parks, public safety and other services.  This will force                           
on Alaska's citizens the very cuts we argued against but said would                                 
result from the legislature's actions such as closure of the Steese                                 
Highway, layoff of more than 40 filled road maintenance positions                                   
around the state, and closure of state parks -- despite the availability of                         
additional fees to cover parks' costs.                                                              
Finally, I would note that under the Alaska Supreme Court's decision                                
in Alaska Legislative Council v. Knowles, 21 P.3d 367 (Alaska 2001)                                 
a governor may not veto intent or other language even if that language                              
is unconstitutional.  Therefore, the fact that these language provisions                            
remain in the bill should not necessarily be construed as agreement                                 
with the content.  For example, since the courts have clearly stated that                           
the state cannot deny funding for abortions when pregnancy services                                 
are funded, my administration will disregard that unconstitutional                                  
language even though I cannot veto it.                                                              
This year, like many in the recent past, my administration started the                              
session hopeful of finally developing the coming year's budget within                               
the framework of a long-range fiscal plan.  And again we were hopeful                               
of working on a budget with the legislature in an open process with                                 

2002-08-14                     House Journal                      Page 4067
full disclosure of the true financial impacts of providing services.  I                             
think the public shared these hopes, but they were not fulfilled.  I                                
believe that Alaskans deserve more than the shortsighted approach                                   
used by recent legislatures to spend billions of public dollars providing                           
services on which Alaskans depend without a long-range fiscal plan.                                 
                                             Tony Knowles