Dear Neighbors,

• The Legislature cut nearly $64 million from the budget this year in General Fund (state) money.
• Efficiencies recommended by the Governor saved money, allowing us to increase funding for core services.
• All anticipated spending that was previously budgeted through the supplemental budget was moved into the General Fund portion of the budget. Only emergencies, such as fires and unanticipated expenses such as increases to caseloads, will be funded through the supplemental budget.
• The greatest majority of increased spending came from increases to education and to pay debt service on capital projects approved by the voters.

The Governor has made it clear that he intends to veto enough of the spending approved by the Legislature in order to draw $200 million less from the Constitutional Budget Reserve (CBR) this year than was used to balance the budget for Fiscal Year 2003. He and his staff will be carefully studying the budget passed by the Legislature to determine what spending he will veto in order to reach that target. Those vetoes may come from the capital and/or operating budget, and from any state department.

On the plus side of the budget, the Legislature approved bills that will bring in additional revenue. While none of these bills approaches a complete fix to the state's revenue problems, they will have a positive effect on the state's bottom line. For example, I sponsored legislation to require all cigarette packs sold in Alaska to display a tax stamp, indicating that the state excise tax has been paid. The tax stamp will allow the Department of Revenue to better enforce the existing (and unchanged) tobacco tax, and is expected to generate at least $3.5 million in additional revenue each year.

If you would like to have a more detailed look at the state budget for Fiscal Year 2004, you can find much information on the Legislative Finance website at http://www.legfin.state.ak.us/. Information about bills considered by the Legislature can be found on the Bill Action and Status Inquiry System (BASIS) at http://www.legis.state.ak.us/basis/start.asp. If you need additional information, please contact me at 1-800-892-4843. My new Anchorage staff person, Lauren Wickersham, will not be in the office until June 11. However, my Juneau staff person, Karen McCarthy, will be available to assist you at that number. Or, just e-mail me at .

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