Did the Republican-led House and Senate Majorities cut the budget? Have we controlled the runaway growth of government in Alaskan's lives? Do department managers believe their budgets have been reduced? Did the House Democratic Minority leader acknowledge, on the floor of the House of Representatives, that the Five-Year Plan had cut State spending? All the answers are YES.

Why, then, is the Anchorage Daily News ("Fiscal gap trims: facts or fictions?" - May 18, 2000 and "Another year, another unbalanced budget for Knowles, lawmakers" May 19, 2000) trying to discredit the success of the plan? Why did the Anchorage Daily News spend five years bashing the Republican Majority for "draconian" reductions in State spending if, in its own opinion, there were no reductions?

To paraphrase President Ronald Reagan, an economist is a person who will take what is happening in real life and develop a model to prove it can't be. In your May 18, 2000 article, your economist/columnist has twisted numbers to prove his ongoing opposition to the Republican Majority and its Five-Year Plan. The question is not a battle of economic models and recasting of counting methods. The question is whether Alaskans are paying more taxes for State government and whether general State government activities have been reduced in size and scope.

The Five-Year Plan was developed to assist the Republican Majorities in prudently managing the State's fiscal resources. It has been an unqualified success when measured by standards that are meaningful to Alaskans. How should the last 5 years be measured? We believe success should be measured by the fiscal shape of the state as compared to 5 years ago.

1. Are we spending fewer general fund dollars now than 5 years ago? YES. According to the Legislative Finance Division, we are projected to spend almost $290 million fewer general fund dollars in FY 01 than we did in FY 96. General fund dollars are those that would need to be supported by general taxes or the Permanent Fund when the Constitutional Budget Reserve (CBR) runs out.
2. The current budget is almost $700 million lower than it would be if it had been allowed to grow with inflation and population growth.
3. Welfare-to-Work sponsored by the Republican Majority has reduced the demand for welfare services.
4. Have nonformula operations of state government been reduced? YES. Ask any commissioner or division manager, or state employee. They will be happy to share that they are being required to do more with less funding.
5. Have we gotten the new revenue we expected from the North Star project? NO. Litigation has deferred that income for at least 2 years, costing Alaska at least $30 million per year.
6. Have we increased revenue to the state? YES. The legislature increased taxes on tobacco to help fund education. In addition, Alaska is receiving over $20 million in tobacco litigation settlement - 40% of that money is being used to finance school construction.
7. Did we protect Alaska's savings? YES. The CBR was approximately $2.2 billion in 1996. Today it totals $2.6 billion. The Permanent Fund has grown from $15.7 billion to $28.7 billion. In addition, we deposited an additional $2.353 billion into the corpus of the Permanent Fund while maintaining enough in the earnings reserve to assure the future payment of Permanent Fund Dividends.
8. Are Alaskans paying new general statewide taxes? NO

We were able to bring spending restraint to Alaska's State government. This was accomplished despite the constant chorus of demands from the Anchorage Daily News and others that we spend more; despite proposed budgets from the Knowles Administration which always called for more spending; and, despite Democratic Minorities proposing $175 million in increases to the operating budget in just the last 2 years!

One wonders why those who advocate more taxes and more spending are attacking the success of the Republican Majority's Five-Year Plan? We can only guess that they are unhappy that Republicans have not been willing to tax Alaskans to build a bigger, bloated government. They must be unhappy that Alaskans are freer of government controls than they would like. Likely, they are even more unhappy that, despite their telling us for five years that we couldn't make it work, we did.

We are proud of our accomplishments for Alaskans over the past five years. We believe that most Alaskans are better off now than they were five years ago. We have been able to maintain core government services. We have not imposed general taxes. We have protected our savings accounts. And we have protected the ability of future Legislatures to deal with fiscal problems without a crisis.