Governor Submits $294 Million Spending Increase for FY 2006

An overgrown Medicaid program, sky-high fuel prices and a booming prison population are just a few of the costs that drive a $294 million spending increase sought by Governor Frank Murkowski to supplement this year’s budget. The governor’s supplemental spending request is almost a 10% bump over the $3.1 billion in general fund spending the legislature approved for the current fiscal year, which ends June 30. The request brought immediate condemnation from lawmakers on both sides of the aisle who say state spending is growing out of control in this time of high oil prices and budget surpluses.

The governor has filed three bills that ask for $164.6 million in state money to recoup rising and unanticipated costs by public agencies since last July. Plus he submitted a separate bill to spend $129.5 million in general fund money for public works maintenance and construction projects on top of the capital projects the legislature approved last year. Those projects are part of the governor’s plan for spending the state’s expected $1.2 billion revenue surplus this year. Under his plan, the rest of the surplus would be spent on education funding for next year and as a down payment on a North Slope natural gas pipeline.

The supplemental spending request comes on top of the governor’s proposed $3.6 billion general fund budget for FY 2007, which is an increase of nearly $500 million over this year. The governor’s bills are separated into regular supplementals, fast-track supplementals and “faster-track” supplementals. The faster-track items would mainly cover increased fuel and energy costs to residents and state operations, but it also includes $6.4 million for the governor’s office and the Department of Law for work on a North Slope natural gas pipeline, a $20 billion project being negotiated with three oil producers. (Anchorage Daily News, February 3, 2006) (HMF/2/23/06)