Palin rejects over 30% of stimulus money

31 PERCENT: She says state can't commit to continuation.

March 19, 2009 

JUNEAU -- Gov. Sarah Palin is refusing to accept over 30 percent of the federal economic stimulus money being offered to Alaska, including dollars for schools, energy assistance and social services.

The news Thursday drew anger from those who accused Palin of putting her national political aspirations ahead of the state's interests, and admiration from others who say she has courage to turn down money that would expand government. The state Legislature will have an opportunity to override her decision.

Palin is not taking about $288 million of the $930.7 million that Alaska is due in the federal stimulus. Palin said she is accepting the federal stimulus money that would go for construction projects, but not funding directed at government operations.

"We are not requesting funds intended to just grow government," Palin said. "In essence we say no to operating funds for more positions in government."

Palin first told the news media that she's turning down nearly half the federal stimulus money -- but later conceded that does not count the Medicaid money she is accepting. That brings down what she's refusing to 31 percent of what the state government could get. Local governments and nonprofits could still compete for stimulus grants.

The biggest single chunk of money that Palin is turning down is about $170 million for education, including money that would go for programs to help economically disadvantaged and special needs students. Anchorage School Superintendent Carol Comeau said she is "shocked and very disappointed" that Palin would reject the schools money. She said it could be used for job preservation, teacher training, and helping kids who need it.

Palin said she's sure that her decision on the education money will draw the most heat, and that she wouldn't be surprised if the Legislature tries to change it. "It is a matter of discussing with our lawmakers if the expansion there is something we're willing to pick up the tab for when the federal dollars dry up, when they no longer flow into Alaska," Palin said.

Anchorage Democratic Rep. Les Gara argued that it's bad governing not to do things he said would improve schools and reduce the unemployment rate for two years just because it might not last forever. Gara suggested that Palin is pandering to voters outside Alaska in order to further her own national political ambitions.

"I'm worried the governor is taking this sort of national political stance, which is that she's going to be the opposite of Barack Obama on everything," Gara said.

Sitka Republican Sen. Bert Stedman suggested a combination of factors could be at work.

"She's got the best interests of the state and her career at heart," said Stedman.

Stedman, who is a leader in the bipartisan majority in the state Senate, said legislators will take a close look at what Palin has done but that it's too soon to pronounce judgment.

Palin said she'd work with the Legislature to see if it wants to go ahead and accept some of the money -- although she didn't rule out vetoes if she doesn't agree with the choices. Palin said a dialogue with legislators and the public is needed for Alaska to chart its course.

There's confusion over when the state Legislature's deadline is to decide if it wants the money Palin turned down. It appears April 3 could be a deadline, but state lawmakers said they plan to get around it by passing a resolution technically accepting all of the stimulus money by that date. Then they'll do the heavy work of figuring out what money they want, with the knowledge Congress can't really force it on them. That's liable to dominate the rest of this year's legislative session, which ends April 19.

The governor could have a point in not wanting the money, said state House Speaker Mike Chenault. "There's a number of us that have the same concerns about what does it do to our budget in the future," said the Republican from Nikiski.

But Chenault said that the federal education money, in particular, could be good to have.

Members of the all-Republican state Senate minority said Palin is taking a wise course and it's important not to accept federal money that could end up costing the state in the long run. People could come to expect the programs, leaving the state paying for them to continue, said the governor and her allies within the state Legislature.

"This offer from the Congress and the Obama administration is a little bit like having way too much to drink," said Sen. Con Bunde, a Republican from Anchorage. "A good time may be had by all, but the hangover the next day, and the consequences of what you did while you were drunk, may be with you for a long, long time."

Acting Anchorage Mayor Matt Claman said he's disappointed Palin chose to turn down funding that would create jobs and maintain services. "Her rationale is like turning down a gift card because it expires in two years," Claman said in a written statement.

Palin is turning down money for weatherization, energy efficiency grants, immunizations, air quality grants, emergency food assistance, homeless grants, senior meals, child care development grants, nutrition programs, homeless grants, arts, unemployment services, air quality, justice assistance grants and other programs.

Palin said some funds she turned down have federal strings attached: Up to $64 million in energy funds would require the state to mandate a building code change, her office said, while $15 million in unemployment help requires the state to expand eligibility for benefits. Alaska should decide these things, Palin said.

There was mixed reaction from Alaska's Congressional delegation.

U.S. Sen. Mark Begich called on state legislators to accept the stimulus money. "I trust the legislature will do the right thing and take Alaska's share of the money for education in the economic recovery package," the Alaska Democrat said in a written statement. "We owe it to our children to give them the most opportunities possible, and this is money fairly allocated to Alaska in this stimulus package."

U.S. Rep. Don Young, R-Alaska, who along with all House Republicans voted against the stimulus package, wouldn't take sides Thursday. Alaska Republican Sen. Lisa Murkowski said the governor was right to take the part of the stimulus that covers transportation and other infrastructure projects -- as that will create jobs in Alaska. She said Palin is required to certify that the stimulus money will be used to create jobs and foster economic growth; Palin has made her decision on what funds she thinks meet that criteria and now it's the Legislature's turn to review it, Murkowski said.

Palin appears to be the third Republican U.S. governor to say "no thanks" to a portion of the $787 billion federal economic stimulus package, signed into law last month. Texas Gov. Rick Perry and South Carolina Gov. Mark Sanford -- both also Republicans -- already have rejected some of the money that is allocated to their states.

Sanford, who like Palin is seen as potentially having his eye on a 2012 presidential bid, already has drawn criticism for his refusal to take some of the federal money. The Democratic National Committee began on Monday to air a television commercial critical of the South Carolina governor's move. The DNC immediately took the offensive Thursday and declared Palin a hypocrite, given that she has requested earmarks and that Alaska receives more federal dollars per capita than any other state.

Ed Rendell of Pennsylvania, a Democrat who heads up the National Governors Association, said it would be hard to tell a worker who loses his or her job that the state is turning down unemployment assistance in order to make a statement. But he said he understands Palin's decision might be based on unique conditions in Alaska.

"Alaska doesn't have a deficit because of the oil revenues, even though oil revenues are down," Rendell said. "That puts Gov. Palin in a different position. She doesn't need federal funding to keep from laying off workers. Alaska is probably in a different status than almost any of us."

Palin said it's not a gift when Congress offers dollars with strings attached that would increase government and require the state to follow mandates from Washington, D.C.

"To me it's a bribe," Palin said.


Daily News reporter Erika Bolstad contributed to this story.

Alaska stimulus money

Gov. Palin on Thursday said she would accept only part of the federal economic stimulus money heading to Alaska. A breakdown of what she wants and what she's rejecting:

TOTAL STIMULUS FUNDS ALLOCATED TO ALASKA: $930.7 million

REQUESTED BY GOVERNOR: $642.6 million

Among the programs included in the request: More than $175 million in highway funding; $78 million in aviation projects; $68 million for water and sewer projects; $20 million for job training; $39 million for public housing; $128 million for Medicaid reimbursement; and $116 million for a new university research vessel. REJECTED BY GOVERNOR: $288.1 million

Among the programs rejected: $171 total in various education programs including special education, technology, "fiscal stabilization" money, emergency food assistance and school lunch programs, immunizations, infant learning and additional funding for schools with a high proportion of poor students; $28 million state energy program; $18.5 million weatherization program; $8.5 million energy conservation program; $7.2 in public safety program.

Source: Alaska Office of Management & Budget

For the complete list, go to www.gov.state.ak.us/omb

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