JUNEAU -- State lawmakers are preparing to reject Gov. Sarah Palin's plan to cut state spending, including $93 million for schools, and replace it with federal economic stimulus money. That would set up a showdown between the Legislature and the governor, a relationship already fouled by lots of bad blood.
Sitka Republican Sen. Bert Stedman, who leads the state Senate effort on the stimulus, said Tuesday the "likelihood is not high" that the Senate will agree to the plan. Senate President Gary Stevens, a Kodiak Republican, said he thinks the Senate majority is in agreement that Palin's proposal is not a good idea.
"At this point (the plan) doesn't make any sense to me," Stevens said Tuesday.
The governor has balked at accepting nearly a third of the $930.7 million economic stimulus money that Alaska is eligible to get. She has heavily criticized the stimulus but said she'll take the money if the Legislature agreed to cut state spending -- mostly for education -- and use the federal money instead.
But that's not likely to happen. Legislators said they want to use the stimulus money as an opportunity to improve schools, as well as share with cities, including $8 million for Anchorage. Using it just to save state money holds little interest.
"It seems to me that is not the point of the stimulus. The point of the stimulus is new jobs and to encourage the economy and it is not to replace monies you were going to spend anyway," said Stevens, the president of the Senate.
The big question is whether Palin will maintain her opposition to the stimulus and veto federal money that the Legislature accepts. Stevens said he doesn't think the Legislature would try to override her vetoes, since Palin would end up with the final say anyway by just refusing to administer the spending.
Palin won't say what she is going to do if the Legislature shoots her plan down.
"We'll look at the pros and cons and the governor will make her decision," said Karen Rehfeld, the governor's budget director.
Rehfeld said the governor's plan would still let schools get some stimulus help to deal with areas like disadvantaged children, while using other parts of the federal package to replace state spending and lessen the draw on reserves for education and other areas. "We thought it was a pretty good idea," Rehfeld said.
There's been friction all year between legislators -- Republicans and Democrats alike -- and the Republican governor. This is a legislative session that began with the Senate finding the governor's husband and top aides in contempt for not showing up when ordered by subpoena to testify in the Legislature's so-called "Troopergate" investigation of the governor (they eventually gave written testimony.) Palin's fiercest allies are in the all-Republican Senate minority, but there are only four of them out of 16 senators.
The bad blood has culminated in this stimulus fight. Legislators complain Palin has not communicated well with them -- a criticism they've leveled at her for much of the 90-day session -- and that she introduced her current stimulus plan too late in the session. The governor brought up the concept on Friday and formally submitted the proposal Tuesday, with six days left in the 2009 session.
"We're in the final days. Some of these things should have been addressed a month and a half ago," said Stedman, the Republican state senator from Sitka.
Top legislators met with Palin on the stimulus and other issues on Monday. But House Speaker Mike Chenault, a Nikiski Republican, wrote on his blog that it "wasn't particularly productive." Some legislators take swipes at Palin for her plans to leave the legislative session during this decisive final week to go to Indiana for Thursday's nation's largest pro-life banquet and an event for special needs children. It's common for legislators themselves to skip out of Juneau during the session, though, and the entire Legislature shut down for nearly a week in March so lawmakers could go to Washington, D.C., for energy meetings.
Palin told reporters on Friday she has objections to the stimulus, including philosophical ones based on the size of the federal deficit, and is just trying to find a solution given that the Legislature wants to take every penny of the federal package anyway.
The governor has hardly left Alaska during the 90-day legislative session, said it's a quick trip, and that she does not understand claims she hasn't been engaged.
"We have a very good working relationship as far as we know with lawmakers," Palin said during Friday's news conference.
Anchorage Republican Rep. Mike Hawker said the governor's staff is "communicating better with the Legislature than I've ever experienced in the last three years." But Palin herself hasn't had much to say to legislators, Hawker said, and he is concerned that the federal government wouldn't go along with her idea of swapping out state spending for federal stimulus money.
"There's the practical peril of whether the federal department of education rejects that approach or not," said Hawker, who is handling the stimulus in the state House.
Hawker's office, working through the federal Department of Education, has identified $38 million in stimulus funds that Alaska might not get if it follows the governor's plan. But Rehfeld, Palin's budget director, said her department is getting a different message from the federal officials it's working with.
"We're getting very good feedback from those people who are actually going to be the ones who are going to make the decisions about the use of those funds," she said.