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State rolls millions in to General Fund

By   /   July 15, 2010  /   2 Comments

After several years of internal discussion and organization, the Legislative Finance Division has completed a project that adds more than $750 million into the General Fund in an effort to simplify State finances.

Legislative Fiscal Analyst David Teal said the Budget Clarification Project reassigned almost 60 minor funds, including the State corporation dividend funds and proceeds from University of Alaska tuitions, to the General Fund.

“Alaska’s budget got to the point where nobody except a few people in government could even understand it and the legislature, the press and the public are all focused on how much is in the general fund,” Teal said. “The point is, there’s all this extra money but now there is no secret stash that legislatures can use to finance their special projects.”

Senator Bert Stedman (R-Sitka), co-chair of the Senate Finance Committee, said the consolidation of funds would make the budget more transparent and give the public a better idea of exactly how much is being spent.

Stedman said media reports on budgetary issues often only include increases or decreases in General Fund spending, and do not account for the $1.1 billion kept in separate, “other” funds.

While reports claimed a two percent increase in spending for FY 2011, Stedman said those numbers represent only General Fund expenditures, and the total budget increase is closer to 15 percent.

“In the legislature there are a lot of shell games going on,” Stedman said. “They moved general funds to other funds, so it appears as though your spending is going down but really it’s staying the same or even going up.”

Stedman said the change in fund classifications would not change the level of State spending, rather make State spending more understandable for both the public and the legislature.

“It was just a mirage to confuse the public, but now, when you present the General Fund numbers, you get a much more accurate idea of State spending,” Stedman said. “If you take the covers off the peanuts you can’t play the game anymore.”

By Kirsten Adams

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Kirsten is an investigative reporter for the Alaska Policy Forum. She covers state fiscal, educational and transparency issues and can be reached at kirsten@alaskawatchdog.org