Anchorage Daily News

JUNEAU -- Sometimes it's the little things that cause the biggest trouble.

So it is with Gov. Sarah Palin's tenuous relationship with the state Legislature, dominated by members of her own Republican party.

The two sides are scrapping over $70 million -- small change considering the billions in surplus oil dollars the state is raking in.

The rift could intensify today on the House floor, and the outcome might even set the tone for how Palin and lawmakers get along through the rest of her term.

Some lawmakers just can't see any need for quarreling.

"We're drowning in cash and we've got a $70 million dispute," said Rep. Mike Doogan, D-Anchorage. "Did it really have to come to this kind of firefight?"

Here's the backdrop for today's showdown.

This is about budgeting, the biggest and most time-consuming task in Juneau. The dispute cuts right to the heart of power in the Capitol -- the Legislature's power to spend, and Palin's power to veto.

The blood began to go bad last year, when the freshman governor used her veto pen to cut $231 million in hometown projects the lawmakers had passed.

That startled many legislators. In the words of Sen. Gary Wilken, R-Fairbanks, the vetoes "resulted in frustration, cynicism and perhaps even anger."

Palin said she made the cuts to subdue state spending and to focus more on her own priorities such as health, public safety, transportation and education needs.

Then she threw a little kerosene on the flames, saying somebody had to be the "adult in the house."

Nine months later, that remark still burns many legislators. You hear it over and over again in the Capitol.

A few weeks ago, rumblings began to surface that some lawmakers intended to resurrect some of those vetoed items and add them to what's known as the supplemental budget -- a routine request governors make to cover unexpected shortfalls in the current year's budget.

Sure enough, the Senate on March 5 passed Palin's supplemental budget request with dozens of vetoed projects attached -- $51 million worth.

Hardly anybody noticed that the senators also voted to deposit a landmark $3.6 billion into state savings accounts.

While Palin says bravo to the saving, she's annoyed by the apparent dare to her veto power.

"I believe it's inappropriate to stuff a supplemental budget with a package of last year's vetoed capital projects," she declared in a written statement.

Which brings us to today, when the House is expected to vote on the supplemental budget bill. Except with this difference: House members have tacked on more vetoed items, bringing the total to about $70 million.

Leading lawmakers insist they're not adding the items as a poke at Palin.

Rather, they say the projects are legitimately needed back in their home districts. Rural lawmakers especially say money is needed as fast as possible to take advantage of the short summer work season.

And what are these projects?

Here's a sampling:

• Ketchikan Little League batting cages, $60,000

• Savoonga teen center renovation, $75,000

• Locker replacement at Anchorage's Hanshew Middle School, $100,000

• Sitka sewer line extension, $209,000

• Eagle River Fire Station 11 expansion, $496,000

• Reconstruction of Anchorage's Bluebell Drive, $600,000

Palin, in an interview Saturday, said she's not ready to say whether she would veto the projects again.

"I do have to leave my options open," she said.

The reason, Palin said, is because bigger pieces of the state spending puzzle are still in play before lawmakers adjourn April 13, including the operating and capital budgets for next year.

The capital budget is usually the place for items such as the projects Palin vetoed last year, not the supplemental budget.

In recent days, Palin and lawmakers have circled one another like two tigers, not knowing whether to fight or be friends.

Here are two examples:

On Thursday, House Speaker John Harris, R-Valdez, invited Palin to make an extraordinary personal appearance at a crowded open caucus of all House members.

Palin and her chief of staff, Mike Tibbles, offered to tolerate perhaps $1 million in projects per House district if all sides could come together on a comprehensive spending and saving plan for the state. It was a cordial meeting.

On a rare sunny Saturday, however, House budget writers were putting Palin's department managers through an unusual grilling about their own funding requests for road, airport and other projects.

Are such hearings a kind of retaliation?

"Could be a little of that, but my attitude is no, this is good, this is healthy," Palin said.

Harris reckons the House today will pass the supplemental budget with the $70 million in vetoed items intact. And he believes Palin ultimately will veto them again.

"They'll be upset," Harris said of his fellow lawmakers. "But that isn't the end of the story. What you need to do is continue to negotiate with the governor."

Lawmakers could try to overcome a Palin veto, but that would take a three-quarters vote of the combined House and Senate -- a hurdle seldom achieved on an appropriations bill.

"It would show a lot of goodwill for the governor to support the vetoed items that are needed in the communities," said Sitka Republican Sen. Bert Stedman, co-chairman of the Senate Finance Committee.

Regardless, Palin said nobody should expect her to repeat that "adult in the house" line.

"I learned the lesson there," she said. "I will not repeat a quote that a staff member gave me and then I parroted to the press."

Find Wesley Loy online at adn.com/contact/wloy or call him in Juneau at 1-907-586-1531.

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