Legislators want to accept stimulus funds

STIMULUS: Leaders say they want most of the federal dollars.

March 24, 2009 

JUNEAU -- Top Alaska legislators said Tuesday they're likely to accept at least most of the federal economic stimulus money that Gov. Sarah Palin did not.

"I think at the end of the day we will end up taking most of the funds," said Anchorage Republican Rep. Mike Hawker, who is leading the House effort on the stimulus as co-chairman of the finance committee.

Senate Majority Leader Johnny Ellis agreed. "I would be surprised if we give up much or any of the federal money," the Anchorage Democrat said.

Palin announced last week she was not accepting $288 million of the $930.7 million that the state is due in the federal stimulus. Palin aides have said in the days since that the governor did not reject any money, leading some state legislators to charge the governor with backpedaling as a result of furor over the announcement.

The biggest chunk of money at issue is about $170 million for education. School district officials are mad, and Anchorage Democratic Rep. Harry Crawford said he doesn't expect legislators to withhold the money.

"I don't see anybody getting in front of that train," he said.

Senate President Gary Stevens, a Republican from Kodiak, said he's especially interested in the money that would go for special education and schooling for disadvantaged children. Stevens said his meetings with the governor prior to her stimulus announcement had given him the impression she was going to go after more of the money and he was surprised to hear otherwise last week.

But legislators do have questions about the stimulus package and plan on hearings in the coming weeks to sort out the details. Some share Palin's view that accepting federal money could create expectations among the public for services that the state would need to either fund or abandon after the federal dollars stopped coming.

"I am very concerned and I know Alaskans are about what we're about to do here," said Fairbanks Republican Rep. Mike Kelly.

DID PALIN REJECT MONEY?

Palin aides have said the past few days that the governor has been mischaracterized.

"The governor has not rejected any funds -- that I think was perhaps the interpretation and I know certainly in some of the coverage of the press event last week," Karen Rehfeld, the governor's budget director, told the House Finance Committee on Tuesday.

But Senate Majority Leader Ellis, a Democrat, said Palin's announcement "seemed very clear to me about rejecting one-third of the stimulus dollars. ... There's backtracking and explanation going on now."

Wasilla Republican Sen. Charlie Huggins said there was a shift in tone as a result of the public outcry that followed Palin's announcement last week that she wasn't accepting the money.

"The (Palin) administration worked through the weekend and they fixed some of their slides based on public sentiment. And that's the way the democratic process works: It's not good, it's not bad, it's just sobering," he said.

Chugiak Republican Rep. Bill Stoltze, however, disputes that Palin is changing the message and said she was just being cautious about the money.

"I looked at the governor's statement and I didn't hear a rejection." he said.

The governor or the Legislature must formally ask for the federal stimulus money available to Alaska in order for the state to receive it. Palin announced last week that she was only requesting the portion that would go for construction and infrastructure and that "in essence we say no to operating funds for more positions in government."

She made arguments for not accepting the money -- including that some has strings attached and that the state might be left to pick up the tab if people expect programs to go on after the federal money runs out. But Palin also said she would work with legislators and that a public discussion is needed about what should happen with the money -- "more opportunity for more information," the governor called it.

A reporter asked Palin at the time if it was fair to say she was rejecting the money.

"If that's the way you want to look at it," she replied.

STIMULUS STRINGS

Legislators said they are worried that, if they do accept the money, Palin will either veto parts of it or simply not fill out the necessary paperwork to receive it. Two Anchorage Democratic senators, including Senate Judiciary Chairman Hollis French, questioned if the state can even legally get the money if Palin doesn't expressly request it, although that's not the prevailing view among their colleagues.

Palin will not rule out vetoes. But her budget director, Rehfeld, said state agencies are continuing to do the paperwork necessary to ensure Alaska does not miss deadlines if the Legislature accepts the money.

One argument going on in the Capitol is about what strings are attached to the money. Rehfeld told legislators that up to 25 percent of the money Palin didn't accept could have strings that require a change in state policy. Some involves an increase in the eligibility for unemployment benefits.

But the biggest pot of money the Palin administration identified as having strings is $56 million for weatherization, energy efficiency grants and the state energy program. Rehfeld said accepting it could require implantation of a statewide energy code.

There's dispute over that.

House Finance Committee aide Larry Persily found the requirement for energy efficiency standards only applies to about half of that money. The Palin administration said it's trying to get a written determination on it from the federal government.

Anchorage Rep. Hawker objected to Palin saying it's a requirement for Alaska communities to adopt a uniform "building code," as she did in her statement to the press about not accepting stimulus money.

"I'm a little bit concerned there has been a myth perpetrated upon folks who are now using it. It fits on a bumper sticker very nicely and it's becoming conventional wisdom, and frankly it's just not true," Hawker said.

Rehfeld responded that it does require a statewide energy building code, similar to what the Alaska Housing Finance Corporation uses now.

Persily said accepting the money would require the state to adopt (within eight years) codes for residential and commercial structures that meet or exceed international energy-efficiency standards. The standards must apply to 90 percent of new or renovated building space; not existing structures. The requirement deals with energy-efficiency standards, not a complete set of building codes, Persily said.

"Out in the area I represent this is pretty sensitive subject matter," said Mat-Su Rep. Stoltze. "If it is a myth, let's go through the process of dispelling it, or portions thereof. But even pieces of a myth can be pretty overbearing for some parts of my district. It's not paranoia if they are really out to get you. So let's just make sure they are not."

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