Legislators Quibble with Palin’s Characterization of Budget Changes

Sen. Bill Wielechowski, D-Anchorage

Sen. Bill Wielechowski, D-Anchorage

JUNEAU, Alaska — A revised revenue forecast for the 2010 fiscal year released by the Palin administration Wednesday is prompting legislators to speak out.

Gov. Sarah Palin announced a drop of more than $2 billion in revenue along with more than $445 million in spending cuts for the 2010 operating and capital budgets.

Legislators say some of the so-called spending reductions are simply deferred payments that shouldn’t be considered cuts.

Karen Rehfeld, director of the Office of Management and Budget

Karen Rehfeld, director of the Alaska Office of Management and Budget

“You’ve got $100 million in oil investment credits that were not spent, so that’s not really a cut, that’s something we’ll expend in the future,” Sen. Bill Wielechowski, D-Anchorage, said. “You’ve got another $166 million paying down the unfunded liability in PERS/TRS, we’re essentially deferring that.”

Semantics aside, the changes reduce the draw on state savings, said Karen Rehfeld, director of the Office of Management and Budget.

“If we’re not going to spend that money in the next year, that reduces our spending plan,” Rehfield said. “And any reduction in our spending plan reduces the draw on reserves at the end of the fiscal year.”

Palin says the state will have to take more than $2.5 billion out of reserve funds in 2009 and 2010 to make ends meet.

Jason Lamb
KTUU – Alaska’s News Source

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