Bond deal clears way for adjournment
A package of proposed general obligation bonds for schools, the Anchorage Museum and the University of Alaska totaling $236.8 million was approved May 19.
Separately, legislators approved $226.7 million in transportation projects at the end of the regular session, May 16. Transportation funding included a mixture of general obligation bonds and reimbursement by the state for municipal bonds issued for ports and other local projects.
The regular session was extended for two days from the required ending May 14, after 120 days, as the state Constitution allows.
General obligation bonds must be approved by voters in the November 2002 state general election. Legislators made the municipal debt reimbursement contingent on voter approval of the general obligation bonds.
Lawmakers are under the gun to build new schools and rehabilitate several old schools in rural Alaska under a state court decision that found bias in favor of urban schools in appropriations over several years.
If voters approve, eight new schools would be built, and design and engineering would be done for five more new schools, mostly in rural Alaska. These are the top 14 projects on the state Department of Education priority list for school construction, and would be financed by $170 million in state general obligation bonds.
Another $61.7 million in university projects and $5 million in improvements at the Anchorage Museum of History & Art would be paid for with general obligation bonds.
Separate from the bond package, a number of urban schools would be built under the debt reimbursement scheme, where municipalities would issue bonds for school construction with 70 percent of the debt paid by the state.
This is contingent on passage of the general obligation bonds under the legislation passed, but it did not include a total dollar amount.
On other issues, the Legislature failed to take action on a plan to cover the state’s long-term fiscal gap when it concluded its regular session.
A state personal income tax was passed by the state House, along with a proposed change in the way the Alaska Permanent Fund manages income that would make some fund earnings available to the state treasury.
The state Senate did not approve either of these initiatives, nor another proposal passed by the House to use some permanent fund income to help fund municipal services.
The only new revenue measure passed was an increase in state alcohol taxes, which would generate about $19 million per year.
The expected fiscal gap, the difference between recurring state income, mostly from oil and gas, and state expenditures, will total almost $1 billion this year. The state will withdraw money from the Constitutional Budget Reserve, a state cash account, to cover the deficit.
Lawmakers also failed to take up subsistence this year. When the Legislature calls itself into special session it can take up any issue, but subsistence was not included in the list of unfinished business included on the special session agenda.
Knowles may yet call a special session on subsistence, his spokesman, Bob King said. Knowles may wait to see if there is any change in the position of key senators who oppose a constitutional amendment on subsistence before including it on the agenda of a special session he may call, King said.
When the governor calls a special session, he or she sets the agenda instead of the Legislature.