2009-08-05                     House Journal                      Page 1211
HB 81                                                                                                                         
The following letter dated May 21, 2009, was received:                                                                          
                                                                                                                                
"Dear Speaker Chenault:                                                                                                         
                                                                                                                                
On this date I signed with line-item vetoes the following bill passed by                                                        
the first regular session of the Twenty-Sixth Alaska State Legislature                                                          
and am transmitting the engrossed and enrolled copies to the                                                                    
Lieutenant Governor's Office for permanent filing:                                                                              
                                                                                                                                

2009-08-05                     House Journal                      Page 1212
      CONFERENCE CS FOR HOUSE BILL NO. 81(brf sup maj                                                                           
      pfld H)                                                                                                                   
      "An Act making appropriations for the operating and loan                                                                  
      program expenses of state government, for certain programs, and                                                           
      to capitalize funds; making supplemental appropriations; making                                                           
      reappropriations; making appropriations under art. IX, sec. 17(c),                                                        
      Constitution of the State of Alaska; and providing for an effective                                                       
      date."                                                                                                                    
                                                                                                                                
      Chapter No. 12, SLA 2009                                                                                                  
      [Effective Date:  See Chapter]                                                                                            
                                                                                                                                
The budget goals for this administration have been very clear:  to slow                                                         
the growth of government, live within our means, and save for the                                                               
future.  The operating budget presented for legislative consideration                                                           
this past session was designed to meet these goals.  I appreciate the                                                           
careful consideration and support from the Legislature of this request.                                                         
                                                                                                                                
HB 81, as passed by the Legislature this year, contained appropriations                                                         
for FY2010 totaling $8.2 billion, of which $2.8 billion is general fund.                                                        
The budget includes special appropriations for tax credits, revenue                                                             
sharing, and direct deposits to the retirement system costs, and                                                                
includes funding for public education, the university, public health and                                                        
safety, transportation, resource development, and funding for state                                                             
government programs, services, and grants.                                                                                      
                                                                                                                                
The FY2010 operating and capital budgets I submitted to you were                                                                
responsible, fiscally conservative budgets, particularly given the                                                              
current revenue forecast and economic conditions.  I appreciate that                                                            
the Legislature shares the administration's concern about the size and                                                          
growth of the budget and that you made few changes to our request.                                                              
                                                                                                                                
Through line-item vetoes, I have reduced the appropriations in HB 81                                                            
by $36.1 million, including deleting fiscal notes for two pieces of                                                             
legislation that did not pass this session and reducing the amount of                                                           
the transfer from the oil and gas tax credit fund to the general fund in                                                        
order to leave sufficient balance in the fund to pay the FY2009                                                                 
production tax credits.  The enclosed spreadsheet contains a summary                                                            
of the vetoed appropriations including the page and line number, fund                                                           
source, and the reason for the veto.                                                                                            
                                                                                                                                

2009-08-05                     House Journal                      Page 1213
Direct payment of the production tax credits to explorers and new                                                               
producers is an important component of the ACES production tax.                                                                 
Timely payments are essential for a stable tax structure.  The balance                                                          
of the oil and gas tax credit fund is approximately $520 million and                                                            
the Department of Revenue estimates there will be $105 million in                                                               
outstanding reimbursements due in FY2009, which leaves $415                                                                     
million available for transfer to the general fund at the end of the fiscal                                                     
year.  I have reduced the transfer from $450 million to $415 million to                                                         
make sure there are sufficient funds to make timely payments.                                                                   
                                                                                                                                
The reductions we have achieved in the FY2009 and FY2010                                                                        
operating budgets will be continued in our efforts to slow the growth                                                           
of government in the FY2011 budget.  I appreciate your support in                                                               
crafting responsible budgets for the state of Alaska.                                                                           
                                                                                                                                
                                          Sincerely,                                                                           
                                          /s/                                                                                   
                                          Sarah Palin                                                                          
                                           Governor"                                                                           
                                                                                                                                
A spreadsheet from the Office of the Governor, Office of Management                                                             
and Budget, pertaining to budget vetoes accompanied the letter and is                                                           
on file in the Chief Clerk's office.