Governor's budget cuts, but is it far enough?

MAT-SU -- Many across the state are lauding Gov. Frank Murkowski for his recently released, no-nonsense budget plans involving cuts and new revenues, but one Valley legislator says it doesn't go far enough.

Released on Dec. 15, the budget is one of the priorities for the upcoming legislative session. Murkowski said it meets his goals, cutting general-fund spending while responding to the needs of Alaskans.

"Our FY05 budget has absorbed more than $150 million in formula and other program increases, yet has kept general fund and other state spending $170 million below last year," Murkowski said in a recent press release. "A state budget is not just about managing state finances. It is a plan for responding to the needs and hopes of all our people. It's about our education system, the needs of our citizens, our communities, and the protection of our people …"

A few of the highlights of the budget are that it adds 20 new state trooper positions, primarily in rural areas, provides for six new prosecutors, six new public defenders and nine new civil attorneys, along with 14 new social workers and seven new social worker associates in the Office of Children's Services. Thirteen new positions are added to the Division of Oil and Gas, the governor said, to spur economic growth.

"Alaska has 22 percent of the nation's known oil reserves and 19 percent of its known natural gas," Murkowski said. "It is absolutely imperative that we invest in the Department of Natural Resources at this critical stage to make the gas pipeline a reality and to develop oil and gas resources on the Alaska Peninsula."

That adds up to 75 new jobs -- a number offset by cuts to about 490 full-, part-time and non-permanent positions, according to departmental summaries listed at the Office of Management and Budget's Web site.

The number of jobs cut, Wasilla legislator Vic Kohring said Tuesday, isn't enough. Kohring, a proponent of shrinking the size of government in Alaska -- both on the federal and state side -- estimates there are about 24,000 state employees and has advocated reducing that number significantly, thereby reducing an economic dependence on government-sector jobs. Cutting 1 or 2 percent, Kohring said, doesn't go very far.

"It raises the question of, 'Are we cutting?' and if so, where?" Kohring said. "It just underscores that they need to take a more serious look at the costs of state government."

Other proposals are included in the budget -- revenue-generating measures that would add to money in the state's general fund. A transient accommodations, or bed tax that would apply to cruise-ship passengers as well as those staying at hotels and bed-and-breakfast facilities would generate an estimated $32 million each year. An additional $1 tax would be added to tobacco sales, which would generate an estimated $36 million each year. A head tax on cruise ship passengers for gambling would bring in about $3 million, an increase to the state's share of pull-tab receipts would generate about $2 million and a tax on shore-side guided-tour activities would bring in about $5 million each year. In addition to the new sources of revenue, the governor supports the Percent of Market Value, or POMV method of removing funds from the permanent fund. The endowment-type model would automatically add money into the fund to offset inflation, continue distributing Permanent Fund Dividend checks, and allow the Legislature to use up to 5 percent of the market value of the fund to offset the cost of state government.

Kohring said he was disheartened to see the governor support the use of the permanent fund to offset the costs of government. As a member of the House Special Committee on Ways and Means, Kohring has heard the endowment method discussed and touted, but said he believes the budget can be brought into line through cuts instead.

"Spending part of the permanent fund is totally unfathomable to me," Kohring said. "I can't justify it while we're spending [so much]."

Kohring said he plans to continue to focus on spending reductions, and hopes to keep shopping his 10-point plan for reducing state spending around. He's working on a proposal to limit capital spending, he said, and has a state departmental merger bill in the works. He said he's optimistic, although he said he recognizes his plans aren't likely to go far among other legislators.

"The prevailing thought right now, amongst most of my fellow Republicans, is that we cannot cut much further," Kohring said. "I just have to follow my convictions and do what's right."