Magazine article State Legislatures

Alaska Legislature Solves Billion Dollar Problem

Magazine article State Legislatures

Alaska Legislature Solves Billion Dollar Problem

Article excerpt

It took $106 billion from state savings and classic political compromise to fix the accounting problem the Alaska Legislature faced this year. A state Supreme Court order that directed the Legislature to resolve it by the end of the 1994 session made it easier to concentrate.

The high court's ruling, brought about by lawsuits filed separately by a former governor and the Senate majority, said all past-due oil and gas tax payments received since July 1, 1990, should have been placed in the state's Constitutional Budget Reserve, not in the general fund. The Legislature had until the end of the 1994 session (May 10) to replace $106 billion.

Alaska's reserve fund was created by voter approval of a constitutional amendment in November 1989. The reserve was to hold all past-due oil and gas tax payments to the state and make them difficult to spend, by requiring a three-quarters vote of the Legislature to appropriate any of the money.

Governor Walter Hickel, beginning with a $630 million tax settlement from British Petroleum early in 1993, had been depositing the money in the state's general fund where it was available with a simple majority vote. Hickel, with help from Republican-led coalitions in the Legislature, spent much of the errantly deposited funds on a massive school and general construction and maintenance program last session.

How to fund the payback was a problem more political than financial because money to repay the reserve fund was available in various state accounts. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.