Not sure what to make of Palin's budget?
Here's a take from the writers of the Alaska Budget Report, reprinted from the March 8 edition, with permission.
(ALASKA BUDGET REPORT TEXT BEGINS)
Palin amendments: phony cuts, real cuts
Gov. Sarah Palin’s amended budget plan shaves increases in the FY 08 operating budget by $150 million, but achieves the target in large part by switching fund sources, substituting current-year surpluses for FY 08 spending, and hypothesizing an ambitious saving in retirement costs.
Palin’s December budget plan included a $150 million unallocated general fund reduction in operating appropriations. Her capital spending plan included an unallocated excess of $133 million. The governor’s March 1 revised budget plan specifies where $124 million of the GF operating reductions will be made, and shifts $27 million from the capital budget GF allotment to - viola! - meet the overall target GF reduction. Her claim of success relies on:
· shifting $45 million from the FY 07 surplus into the FY 08 capital budget;
· reducing retirement system contributions by $42 million through unidentified “financing mechanisms” - OMB Director Karen Rehfeld suggested pension obligation bonds;
· using an extra $30 million anticipated balance in the public education fund due to lower-than-projected K-12 enrollment in FY 07;
· substituting $13 million in power cost equalization endowment fund earnings for a like amount of general funds;
· shifting $13 million in FY 08 oil and gas spending so that it gets counted as a charge against FY 07, when the state expects a big surplus; and
· reducing appropriations to the debt retirement fund by $5 million based on revised projections.
Those transactions amount to $148 million - nearly all of the claimed “cuts.”
This is not to say there are no real reductions in the governor’s budget. Many of her amendments reflect substantive policy changes and reductions to programs. She had to make far more than $150 million in cuts to offset the inevitable budget increases. The single biggest increase is $37 million in the Health and Social Services budget needed to offset an anticipated reduction in the state’s federal medical assistance percentage (FMAP). Although the impending FMAP drop was known in December, the governor did not include it in the initial budget proposal she issued ten days after she took office ...
(ALASKA BUDGET REPORT TEXT ENDS)