Gov. Palin Criticizes Stimulus Bill, Lowers Alaska State Spending

Alaska Governor Sarah Palin expressed concern about the massive growth in the federal deficit caused by the stimulus bill, and noted that it will not only increase the federal deficit, but require state government spending. 

“Much of the stimulus plan we've seen focuses on spending for government programs that would be a burden on states to continue funding, and doesn't focus enough on spending that actually does put people back to work and stimulate the economy.”

In terms of the stimulus bill's impact on state programs, she noted that the bill punishes good state planning and rewards poor state planning.

"Worst of all, the stimulus package rewards states for not planning when it comes to prioritizing for things like education, as Alaska has planned ahead by forward-funding 21 percent of our General Fund dollars for this very important priority. It appears only those states that did not plan ahead with education will benefit. States like Alaska should not be punished for being responsible; yet that's what the plan means for Alaska right now.”

Underlining the need for Alaska to lower state spending as revenues fall, Palin cut $268.6 million from her budget request.

“With changing market conditions and declining oil prices, our state agencies have been working hard to find savings and still provide needed public services. Through savings targets we implemented at the beginning of the fiscal year and by efficiently managing our programs, we have been able to reduce the current budget and minimize supplemental funding. The more we reduce now, the less we will have to draw from savings at the end of the year.”

Palin is asking the legislature for authorization to tap into savings to cover the estimated $1.36 billion shortfall that may occur even after the proposed budget reduction.

Alaska’s state income and savings reserves increased dramatically under Palin, who in 2007 pushed for ACES (Alaska’s Clear and Equitable Share), a petroleum profits tax plan that emphasizes transparency and increased state revenue. Palin called for ACES as a reworking of the 2006 Petroleum Profits Tax legislation marred by bribery and corruption convictions.

Palin made it a priority to increase the state’s Constitutional Budget Reserve. When Palin took office in 2006 Alaska’s financial reserves stood at $2.15 billion. Current budget reserves are triple that figure: $6.59 billion.