Governor Unveils FY05 Budget

It’s great to be back in the Valley. A group of farmers came here in 1935 as part of the New Deal, with big ideas and dreams of success. We still have big ideas, and I’m as optimistic as those Valley pioneers about the future of this great land.

Not since the discovery of oil on the North Slope have I been so optimistic about the direction of this state and about the legacy that this generation of Alaskans will leave its children and grandchildren.

Why am I optimistic? Because for the first time in a decade, we are moving in the right direction.

The 1990’s were a time of great prosperity for the country, with new capital and new business starts. But Alaska lagged behind because we lacked leadership. We fell into the trap of believing that our future was a choice between resource development and jeopardizing our environment.

As a consequence, our core resource industry of timber, fishing, oil and gas, and mining declined. New jobs were created, but in the lower-paying service and retail sectors, important jobs, but not the underpinnings of a prosperous year-round economy.

We know better. We know that a vibrant economy is essential to the preservation of our environment. We know that in Alaska, we do development right. For the last 18 months, we’ve been moving forward.

We are developing our natural resources, we are creating high paying jobs and we are strengthening our communities. These are the building blocks of healthy, stable families.

These building blocks must stand on a stable fiscal foundation. This year we will return $50 million to the state savings account. This is only the third time since its creation there’s been a surplus returned.

This didn’t just happen, we all know the impact of record high oil prices, but without our spending reductions, we would be millions of dollars in the red. Instead, we’re depositing money back into our savings account.

We’ve reduced government and eliminated 450 positions. My commissioners continue working hard to find opportunities for cost reductions- to cut out the non-essentials and to manage their budgets efficiently. We are examining everything the state buys… from sticky notes to asphalt… if we don’ t need it we wont buy it, and if we need it, we will make sure we get the best bang for our buck.

Our cuts to nonessential government have allowed us to increase investments, in the education of our children and in the protection of our communities, I am proud of this outcome. Even with a 90 million dollar increase in education, we have begun the fiscal year with a budget just $14 million more than in the last fiscal year. That’s a 90 MILLION-DOLLAR INCREASE to education.

Yesterday I signed the operation and capital budgets for the state. These budgets reflect my optimism. Why? Because they invest in the core responsibilities of state government: education, transportation, public safety, and wise use of Alaska’s abundant natural resources.

Our state troopers keep Alaska safe and I am committed to supporting them. I believe our Troopers need the resources to get the job done, to get even tougher on crime, and that’s why this budget adds 20 troopers to the force. This is the largest increase to the Force in two decades.

Once criminals have been arrested- we want them off the street, so we’ve added prosecutors to put the bad guys away. Lack of commitment to convicting criminals over the last decade has left us without prosecutors to handle an over 70-percent increase in felony cases. We have added more prosecutors this year than in the last 10 years combined. And I’m proud to say we’ve given them the tools to do so- with a new comprehensive crime package I signed into law last month.

An educated society is a prosperous society and as a grandfather of 13, I recognize the importance of stable education funding. I listened to the parents, teachers, students, and school boards that met with me this session and worked with the legislature to accomplish a funding increase for education. This was the largest single increase in a decade and it raised our total state classroom spending on k-12 education to $805 million. This will provide the Mat-Su school district an additional $8.4 million. We all benefit when our K-12 and university systems are strong.

Because we value our children, we’re investing additional resources into protecting them. This budget gives us more social workers and child-in-need of aid attorneys to combat child abuse and put the health and protection of Alaska’s children first.

Finally, this budget invests in something that I’ve worked on my entire career in the US Senate- and on which I continue to work as your Governor- resource development. We’ve added 25 new positions in the Division of Oil and Gas- to do one thing- get our resources to market. We’re going to build a gasline and we’re going to increase the oil flowing in the Trans-Alaska pipeline.

Some politicians who aren’t serious about developing our resources want to simply talk about extracting more money from –quote- Big Oil. Yes, we’re looking at the state’s oil taxation policies- but I want to do more. I want to increase investment, increase exploration, increase production, and increase the benefits of Alaska’s oil and gas for all Alaskans. We have to change the way we do business to focus on attracting new investment while lowering the costs of doing business in our state. This is very different from those politicians who just want to tax more and spend more.

I’ve talked about our investments, ones that will produce returns for Alaskans in the future, and move us in the right direction.

In order for the state to afford these increased investments, we’ve accepted our fiscal responsibilities. Much as in a household budget, we have prioritized what the state does and found better, less expensive ways to do business, so the state can afford the things it really needs.

Let me emphasize that we have a fiscal plan. It is simple. Our plan is to live within our means and develop our resource wealth. This includes managing, not only our natural resources, but also our financial resources wisely.

We need to protect the value of our Permanent Fund for future generations of Alaskans. And we need to decide, together as Alaskans, on the wisest use of the income from the growing fund. I have advocated putting dividends first because our economy and individual Alaskans depend on them. After dividends are paid, I believe we should make sure we have enough money for education and that we provide some assistance to help keep the lights on and reduce the property tax burden in communities around the state.

Our state motto-“North to the Future”- reflects the optimism and “can do” spirit of a people who were willing to carve a state out of the wilderness and support that state government, not from taxing a large population but from the wise use of vast natural resources. Victims of our own success, for a while we let the big dollars flowing from Prudhoe Bay make us very complacent. Hard work and determination were replaced with political games that attempt to keep everyone happy by doing nothing.

I am here to tell you that I did not take this job to make everyone happy by doing nothing. Some may disagree with us but we are going to fight for the statehood promise of a responsible state government protecting and educating its citizens and built on a foundation of natural resource wealth. We are getting this state moving again- to provide jobs and opportunity for our young people so they can stay in Alaska to raise families. With a strong commitment to resource development and job creation, we will grow the economy and invest in healthy communities, making Alaska a better place to live for our young families for now and for the next generation.

Thank you again- we can’t cover everything in one speech- we’ve handed out some literature- take it home- read it- you’ll be amazed- we’re killing wolves, expanding the railroad, we’re exploring for mining and we’re changing state government.

I hate to run but we’re headed up to assess the fires around Fairbanks to make sure we’re doing everything we