Legislature(2003 - 2004)

2003-08-20 Senate Journal

Full Journal pdf

2003-08-20                     Senate Journal                      Page 1784
SB 100                                                                                            
Message dated June 12 and received June 16, stating:                                                
Dear President Therriault:                                                                          
On this date I have signed with line item vetoes the following bill                                 
passed by the first session of the Twenty-third Alaska State                                        
Legislature and am transmitting the engrossed and enrolled copies to                                
the Lieutenant Governor's Office for permanent filing:                                              
          HOUSE CS FOR CS FOR SENATE BILL NO.                                                       
          100(FIN) am H(brf sup maj fld H) "An Act making                                           
          capital appropriations, supplemental appropriations,                                      
          and reappropriations; capitalizing funds; making                                          
          other appropriations; making appropriations under                                         
          art. IX, sec. 17c, Constitution of the State of Alaska,                                   
          from the constitutional budget reserve fund; and                                          
          providing for an effective date."                                                         
                               Chapter 82, SLA 2003                                                
                            Effective Date: See Chapter                                            
Introduction of the administration's operating budget last March and                                
the Legislature's subsequent deliberations marked a turning point in                                
Alaska's fiscal history. The approved budgets and revenue-related                                   
legislation reflect our joint recognition that Alaska's finances must                               
immediately be corrected. We also recognize that we must take these                                 
necessary steps now and not wait for a "politically convenient" time -                              
because it will never arrive. This means we must cut spending now,                                  
use our reserves prudently now, and get more users to help pay for                                  
state services. We also recognize that we must take the steps necessary                             
now to generate revenues from resource development in the near                                      

2003-08-20                     Senate Journal                      Page 1785
To these ends, I challenged the Legislature to keep Fiscal Year 2004                                
spending below the current year's and set a goal of not using more                                  
than $400 million of the state's reserve funds, or Constitutional                                   
Budget Reserve (CBR). As you know, the state has relied on the CBR                                  
since its creation in 1990 to prop up spending at a level which the state                           
could not otherwise afford. Unfortunately, if we were to continue the                               
last Administration's "business as usual" level of spending, the CBR                                
would be depleted in early 2006 and we would need to cut the                                        
following year's spending by 40%, sending the state's economy in a                                  
downward spiral. To understand this and not take corrective steps                                   
would be irresponsible.                                                                             
For this reason I proposed that we make spending decisions that will                                
enable the CBR's remaining balance to last for five years. If we limit                              
our annual draw to $400 million, the reserve will be able to serve as                               
"bridge financing" while new resource development causes new                                        
revenues to flow into the state's treasury.                                                         
While the Legislature did a good job in holding down spending, the                                  
Fiscal Year 2004 would have required an estimated CBR draw of $525                                  
million. As discussed with the Legislature prior to adjournment, my                                 
commitment to limit the CBR draw was steadfast. As a result, vetoes                                 
are necessary to prudently use these reserves. Accordingly, I have                                  
vetoed $27 million from the capital budget that, when combined with                                 
action taken in the operating budget means the CBR balance will be                                  
reduced by $380 million in order to support next year's level of                                    
reduced spending.                                                                                   
In reviewing the capital budget, every effort was made to fund projects                             
that are traditional responsibilities of state government, such as                                  
transportation and protecting the public's health and safety. We also                               
vetoed a great number of the "discretionary" projects that the                                      
Legislature added on behalf of district-related requests because again,                             
we must get state government back to funding the basics of what state                               
government should be doing. As earlier announced, we also vetoed the                                
$15 million in funding for Community Capital Matching Grants. For                                   
the time being, local communities will need to make the same kind of                                
tough choices regarding what they do, just as the state is doing. The                               
responsibility to make these difficult choices was not taken lightly, but                           
it's one we recognized that must be done for the reasons earlier                                    

2003-08-20                     Senate Journal                      Page 1786
The need to cautiously use our reserves made each of the vetoes                                     
necessary. The following is additional information about other                                      
Department of Administration                                                                        
Electronic Filing of Public Official and Legislative Financial                                      
Disclosure Statements and Lobbying Activity Reports                                                 
Total veto: $449,000 General Funds                                                                  
Reason: Higher priority services                                                                    
This project was originally proposed to enable electronic filing as a                               
substitute for a reduction in the Alaska Public Offices Commission                                  
(APOC) staff and to replace existing overburdened reporting systems.                                
The legislation and APOC budget ultimately approved by the                                          
legislature did not alter the APOC's operations as significantly as                                 
originally proposed, although agency staffing will be reduced. This                                 
project will be started when alternate funding becomes available. A                                 
$1,000 balance is retained in the capital budget so that if Federal or                              
other funding is obtained, the project could be funded through the                                  
Legislative Budget and Audit Committee during this interim.                                         
Alaska Land Mobile Radio                                                                            
Total veto: $127,000 General Funds                                                                  
Reason: Other revenues to be available                                                              
This reduction to $400,000 is not expected to result in any service                                 
level changes. This appropriation is used to pay management costs for                               
the Alaska Land Mobile Radio project, a long-term effort to improve                                 
emergency communications throughout the state. Existing Federal                                     
grant funding for this project does not cover management costs. The                                 
department will reduce management expenses and seek other funding                                   
to cover management costs.                                                                          
Payroll and Accounting Systems Replacement                                                          
Total veto: $100,000 General Funds                                                                  
Reason: Other savings available                                                                     
The department has determined that $96,000 is expected to remain                                    
from the project's FY2003 capital appropriation.                                                    
Department of Community and Economic Development                                                    

2003-08-20                     Senate Journal                      Page 1787
Grants to Local Governments and Grants to Named Recipients                                          
Total veto: $9,170,050 ($4,786,250 General Funds; $3,099,400 AHFC                                   
                    Dividend; $804,000 ASLC Dividend; $480,400                                      
                    AIDEA Dividend)                                                                 
Reason: Higher priority state obligations                                                           
The Legislature added appropriations for grants primarily to local                                  
governments and/or non-profit organizations. The state's need to                                    
prioritize scarce revenues means that the state will be less able to fund                           
local priorities until a time when state recurring revenue is sufficient to                         
pay for the state's obligations. As a result, many of these discretionary                           
projects were vetoed.                                                                               
Power Generation Projects                                                                           
Total veto: $1,213,276 General Funds                                                                
Reason: Higher priority state obligations                                                           
Grants to Copper Valley Electric Association and Kodiak Electric                                    
Association for payment or retirement of pre-existing debt are                                      
eliminated. The Department of Law has advised that a payment for                                    
retirement of a pre-existing debt to which the state is not a party                                 
confers no benefit on the public, which violates the public purpose                                 
doctrine set out in the Alaska Constitution.                                                        
Delta Junction Settlement                                                                           
Total veto: $500,000 General Funds                                                                  
Reason: Department of Law advice regarding legality                                                 
The Department of Law advises there are several legal concerns with                                 
this appropriation, which is to pay the costs of the settlement                                     
agreement for litigation regarding the establishment of a private prison                            
in the vicinity of the city. If a borough were formed, the balance owing                            
on the loan would be converted to a grant. Law again advises this                                   
violates the public purpose provision of the Alaska Constitution.                                   
Department of Education and Early Development                                                       
Yukon Koyukuk School District, Manley Hot Springs School                                            
Total veto: $27,000 Alaska Student Loan Corporation Dividend                                        
Reason: Review process not followed                                                                 

2003-08-20                     Senate Journal                      Page 1788
State law has established a process by which school district projects                               
are evaluated by the department (AS 14.11). The requesting school                                   
district should include this project for review as part of the FY 2005                              
annual evaluation of school construction and major maintenance                                      
projects for future funding consideration. This ensures consistent                                  
standards are used in evaluating school district projects.                                          
Section 63                                                                                          
Total appropriation: $609,248 General Funds                                                         
This is a one-year only appropriation to be distributed as a grant to the                           
specific school districts listed. These grants hold harmless those school                           
districts affected by the passage of SB 202 that moved funding for the                              
learning opportunity grant program into the formula-driven state aid                                
for public school program.                                                                          
Department of Environmental Conservation                                                            
Village Safe Water Projects -- Rural Clinics Sewer and Water Service                                
Total veto: $500,000 ($125,000 Alaska Housing Finance Corporation                                   
                         Receipts, $375,000 Federal Funds)                                         
Reason: Other funding anticipated                                                                   
This reduces the Village Safe Water projects appropriation to $78.3                                 
million by eliminating $500,000 in funding for water and sewer to                                   
rural clinics constructed with Denali Commission funding. The Denali                                
Commission health care facility program has received over $80                                       
million for facility construction. It is anticipated that loss of the small                         
Village Safe Water contribution for water and sewer will not have an                                
appreciable effect on the program, and that water and sewer costs will                              
be provided by the Denali Commission as part of the overall facility                                
Municipal Water, Sewer, and Solid Waste Matching Grant Projects                                     
Total veto:  $14,454,200 ($6,899,900 General Funds; $2,561,700                                      
                    AHFC Dividend; $1,272,600 AIDEA Dividend;                                       
                    $3,720,000 Federal Funds)                                                       
Reason: Need to prioritize projects                                                                 
This reduces the Municipal Water, Sewer and Solid Waste Matching                                    
Grant funding to $9,423,000. This program makes grants to                                           
communities for drinking water, wastewater, and solid waste projects.                               
Projects proposed by communities for grant funding are assigned                                     

2003-08-20                     Senate Journal                      Page 1789
priority scores as part of an application process. These reductions                                 
eliminate lower priority projects, which includes elimination of two                                
solid waste planning projects considered lower environmental and                                    
public health priority, as well as a Valdez project that warrants further                           
assessment before proceeding. Finally, the annual allocation for the                                
Municipality of Anchorage was reduced in proportion to the overall                                  
program reduction - from $3,000,000 to $1,250,000.                                                  
Village Safe Water Feasibility Studies                                                              
Total veto: $300,000 ($75,000 Alaska Housing Finance Corporation                                    
                         Dividend; $225,000 Federal Funds)                                         
Reason: Lower priority projects                                                                     
This reduces the amount for Village Safe Water Feasibility Studies to                               
$2,645,800 by eliminating three projects that would study solid waste                               
management alternatives in rural communities. Solid waste generally                                 
is a lesser health and environmental threat than drinking water and                                 
wastewater, and solid waste planning projects are considered primarily                              
a local responsibility. Communities may be able to secure financial                                 
assistance from federal agencies.                                                                   
Department of Fish and Game                                                                         
Maintenance and Deferred Maintenance Projects                                                       
Total veto:  $550,000 ($450,000 General Funds, $100,000 Fish &                                      
Game Funds)                                                                                         
Reason: Higher priority services                                                                    
The department will phase maintenance work on its facilities, docks,                                
and commercial fishing aircraft and vessels around the state.                                       
Chignik/Cape Igvak Stock Separation Study                                                           
Total veto: $50,000 General Funds                                                                   
Reason: Funding inadequate                                                                          
The study relates to socioeconomic issues and the funding level                                     
provided by the Legislature is not sufficient to get the job done.                                  
Lower Kenai River Public Use Impact Study                                                           
Total veto: $100,000 Fish & Game Funds                                                              
Reason: Study unnecessary as information available                                                  
The funding is for a public use impact study on the Kenai River. The                                
results were to be used to facilitate implementation of a guide                                     
moratorium on the river. The department believes that the survey is                                 

2003-08-20                     Senate Journal                      Page 1790
not necessary to implement a moratorium. Instead, it will work with                                 
the Commercial Fisheries Entry Commission, Department of Natural                                    
Resources, Governor's Office, and interested legislators to develop                                 
options and recommendations that will identify tools to address issues                              
of growth and development of the guided sport fishing industry on a                                 
statewide basis.                                                                                    
Office of the Governor                                                                              
Americans with Disabilities Act Compliance Projects                                                 
Total veto: $250,000 General Funds                                                                  
Reason: Other priority services                                                                     
This project funds the renovation and remodeling of state-owned                                     
facilities to remove physical barriers to persons with disabilities. In                             
excess of $12 million has been provided since 1993 and projects will                                
continue to be addressed according to a statewide priority list.                                    
Department of Health and Social Services                                                            
Fairbanks Public Health Center Repair                                                               
Veto Total: $110,000 General Funds                                                                  
Reason: Higher priority services                                                                    
Other funding will be explored in order to make the needed repairs.                                 
Department of Natural Resources                                                                     
Division of Parks - Sultana Road Maintenance                                                        
Total veto:  $8,000 General Funds                                                                   
Reason: Higher priority services                                                                    
Priority is funding for the overall management of the park system and                               
accordingly, this project was vetoed.                                                               
Navigable Waters Assertions                                                                         
Total veto: $188,700 General Funds                                                                  
Reason: Other funding available                                                                     
There were three appropriations in the FY 04 budget that fund, in part,                             
asserting ownership of navigable waters. The two other appropriations                               
address both navigable waters and RS 2477. With veto of this one                                    
appropriation, the other two are expected to provide sufficient funding                             
for FY 04 work on assertions of navigable waters and RS 2477 trails.                                

2003-08-20                     Senate Journal                      Page 1791
Recorder's Office Film Conversion                                                                   
Total veto: $250,000 General Funds                                                                  
Reason: Other priority services                                                                     
The original $338,000 appropriation would have converted the last ten                               
years of existing film records to digital images. The project now will                              
be phased so that 3-4 years of records are converted.                                               
Land Acquisition on Northern Afognak Island                                                         
Total veto: $12,450,000 ($2,000,000 Federal Receipts; $10,450,000                                   
Land Acquisition in Diamond Creek                                                                   
Total veto: $450,000 (Federal receipts)                                                             
Reasons: Policy Disagreement                                                                        
The first appropriation was for the purchase of land on Northern                                    
Afognak Island for the Perenosa Bay project. The second eliminates                                  
funding for land acquisition in the Diamond Creek project as part of                                
the Kachemak Heritage Land Trust's development. For too long state                                  
government has allowed (and in the case of the Exxon Valdez Oil Spill                               
Fund actually encouraged) public monies to be used to acquire private                               
land, particularly in Prince William Sound. This is poor policy. We                                 
need to maximize the amount of land in private ownership.                                           
West Icy Bay Remediation                                                                            
Total veto: $150,000 General Funds                                                                  
Reason: Management/other savings                                                                    
The Department of Natural Resources and the Department of Law                                       
have reviewed the West Icy Bay remediation settlement and believe it                                
may be possible to complete the summer 2003 effort for $764,000.                                    
After this work is completed, an evaluation will be made to see if the                              
entire project can be completed next year within this amount.                                       
Airborne Geophysical Surveys                                                                        
Total veto: $100,000 General Funds                                                                  
Reason: Management/other savings                                                                    
DNR will use the remaining $100,000 in funding to provide                                           
information to the mining community by updating the six airborne                                    
geophysical surveys that were flown in 1994 and 1995, instead of                                    
doing new surveys.                                                                                  

2003-08-20                     Senate Journal                      Page 1792
Department of Public Safety                                                                         
Fairbanks Roof Replacement                                                                          
Total veto:   $510,000 General Funds                                                                
Reason: Insufficient funding to complete project                                                    
The roof replacement is estimated to cost over $1 million. The project                              
cannot begin without full funding.                                                                  
New Ketchikan Public Safety Building Construction                                                   
Total veto: $1,227,500 General funds                                                                
Reason:  Project scope change                                                                       
Original financing plans for a new building in Saxman have not been                                 
successful. Less expensive alternatives are being developed during this                             
interim. As a result, $1.2 million remains for a new building.                                      
Department of Revenue                                                                               
Child Support Enforcement Case File Imaging Project                                                 
Total veto: $50,000 ($17,000 Receipt Supported Services; $33,000                                    
                    Federal Funds)                                                                  
Reason: Management/other savings                                                                    
To achieve savings, the design phase will now be completed by in-                                   
house staff, which will extend the project to three years instead of two                            
years. As a result, efficiencies expected to be gained from the project                             
will be delayed until fully implemented.                                                            
Child Support Enforcement Computer Replacement Project-Phase 4                                      
Total veto: $80,000 ($27,200 Receipt Supported Services; $52,800                                    
                    Federal Funds)                                                                  
Reason: Management/other savings                                                                    
Reduction will defer replacement of older computer hardware.                                        
Department of Transportation and Public Facilities                                                  
Weights and Measures Test Unit Replacement Project                                                  
Total veto: $75,000 General Funds                                                                   
Reason: Higher priority services                                                                    
The department will seek lease purchase financing for replacement of                                
Juneau's 1980 volumetric prover truck.                                                              

2003-08-20                     Senate Journal                      Page 1793
Materials Stockpiles                                                                                
Total veto: $300,000 General Funds                                                                  
Reason: Higher priority services                                                                    
Purchase of materials will become part of a specific maintenance or                                 
construction project's cost. Because the purchases now will be bid                                  
separately, economies of scale will not be realized. If project-related                             
costs increase, there may be a slight increase in summer road                                       
maintenance costs.                                                                                  
Federal Programs State Match                                                                        
Total veto: $8,980,500 General Funds                                                                
Reason: Other savings/sharing in costs                                                              
The savings are the result of a decrease in Federal funding that the                                
state expects from the highway and aviation programs (the state's                                   
funds are a percentage of the federal funds). Only the match required                               
for basic highways and aviation programs remain. This lower funding                                 
level will not include the match for any new Federal earmarked                                      
projects or Denali Commission transportation funds that may become                                  
available to the State in future congressional appropriation bills.                                 
Federal aid will continue to be available for the Community                                         
Transportation Program (CTP) and Trails and Recreational Access for                                 
Alaska (TRAAK), but reductions will also be taken in the state match                                
amount available. The department encourages local governments with                                  
road powers to participate in meeting 50% of the programs' match                                    
requirements for local roads and trail enhancements. This will reflect                              
sharing of financial responsibility already found in the Airport                                    
Improvement Program and Harbor Corp of Engineer Program.                                            
University of Alaska                                                                                
Alaska Geospacial Information Coalition                                                             
Total veto: $500,000 General Funds                                                                  
Reason: Legal concerns                                                                              
While the goal of this project to improve the state's mapping has                                   
merit, the Department of Law has raised issues regarding the award of                               
a grant to a group of private firms. This raises competitive bidding                                
issues because it appears specific private firms are attempting to                                  
receive public money and an exclusive right to sell geospacial                                      
information produced. While public agencies support the project, it is                              
inadvisable to approve the funding at this time because of these                                    

2003-08-20                     Senate Journal                      Page 1794
Kenai Vocational Education Project                                                                  
Total Veto: $50,000 ASLC Dividend Funds                                                             
Reason: Higher priority services                                                                    
The University of Alaska has a priority setting process by which it                                 
identifies capital and operating priorities. The local college is                                   
encouraged to work through this process so that its request can be                                  
evaluated and integrated into the University system's overall program.                              
This type of priority setting process is especially important when                                  
dollars are scarce.                                                                                 
Alaska Court System                                                                                 
Deferred Maintenance Projects                                                                       
Total veto: $230,000 General Funds                                                                  
Reason: Higher priority services                                                                    
Substandard lighting in the southeast courts and a roof repair in a                                 
Fourth District court facility will not take place.                                                 
Justice Information and Communication Project                                                       
Total veto: $50,000 General Funds                                                                   
Reason: Higher priority services                                                                    
Communication systems may not be replaced within timeframes                                         
necessary for the scheduled deployment of the court's new case                                      
management system. A delayed implementation schedule may impact                                     
agencies relying on the court's case management system to be                                        
integrated into other state justice projects such as those within the                               
Department of Public Safety and Child Support Enforcement Division.                                 
The fiscal decisions we make over the next few years will be critical in                            
determining the kind of Alaska we will leave for the next generation.                               
These choices, including my vetoes of many worthy projects included                                 
in the capital budget, are in line with my view that we each must take                              
responsibility today, for Alaska's tomorrow.                                                        
Sincerely yours,                                                                                    
Frank H. Murkowski