Senate Majority Declines Republican Caucus’ Challenge to Save $2.6 Billion of Alaska’s Windfall

Juneau – Sen. Gene Therriault, R-North Pole introduced an amendment on the Senate floor yesterday during the debate on the state’s FY 09 operating budget that would have bolstered savings and paid down debt by $2.6 billion.

“Today the Legislature faces record breaking surpluses,” Sen. Therriault said. “Rather than spend this new flood of money we challenged the Senate to save funds for future generations to use for future state budgets. Regrettably they refused the challenge saying it would be fiscally irresponsible.”

Although we are currently experiencing surplus revenues we continue to be advised by economists that we should be saving more in anticipation of deficits in the near future.

The Senate voted against the amendment by a vote of 12 nays to 6 yeas. Sen. Fred Dyson, R – Eagle River, Sen. Tom Wagoner, R- Kenai, Sen. Con Bunde, R – Anchorage and Sen. Gary Wilken, R – Fairbanks, co-sponsored the amendment.

Therriault’s amendment to the operating budget would have set aside $1.9 billion of the projected FY 09 oil tax revenue and deposit it into the constitutional budget reserve, a long term state savings account. This fund has been in existence for thirteen years. Over the last even years the Legislature has borrowed $5.2 billion dollars from the CBR. The Legislature is constitutionally required to repay those funds. The CBR earns considerably more in interest than other Alaska short-term savings accounts.

Therriault introduced a separate amendment that would have appropriated $700 million of the current year’s surplus to pay down the state’s obligation to the Teachers’ Retirement System. By making this deposit the state would have realized an additional savings of $46 million dollars. The Senate voted against this amendment 13 nays to 5 yeas.

“The debt to the CBR is constitutionally unavoidable and must be paid down.” Sen. Con Bunde, R-Anchorage, said. “Most Alaskans realize that in times of surplus it is wise to pay down debt.”