Legislature(2003 - 2004)

2004-09-07 Senate Journal

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2004-09-07                     Senate Journal                      Page 3923
SB 65                                                                                             
Message dated and received July 22, stating:                                                        
Dear President Therriault:                                                                          
On this date I have signed the following bill passed by the second                                  
session of the Twenty-third Alaska State Legislature. I am transmitting                             
the engrossed and enrolled copies to the Lieutenant Governor's Office                               
for permanent filing:                                                                               
     HOUSE CS FOR CS FOR SENATE BILL NO. 65(FIN) "An                                                
     Act relating to the qualifications of correctional officers,                                   
     parole officers, and probation officers; authorizing the                                       
     Department of Corrections to enter into lease-purchase                                         

2004-09-07                     Senate Journal                      Page 3924
     agreements with municipalities for new or expanded public                                      
     correctional facilities in the Fairbanks North Star Borough,                                   
     the Matanuska-Susitna Borough, Bethel, the Municipality of                                     
     Anchorage, and the City of Seward; relating to the                                             
     development and financing of privately operated correctional                                   
     facility space and services; authorizing the Department of                                     
     Corrections to enter into a lease-purchase agreement with the                                  
     City of Whittier for the confinement and care of prisoners in                                  
     privately operated correctional facility space if the state                                    
     cannot provide the same level of services required in state                                    
     law or regulation for the same or less cost; giving notice of                                  
     and approving, and authorizing the entry into and issuance of                                  
     certificates of participation for, the upgrade, expansion, and                                 
     replacement of certain jails in Dillingham and Kodiak; and                                     
     providing for an effective date."                                                              
                               Chapter 160, SLA 2004                                               
                             Effective Date: 07/23/04                                              
I have consistently supported finding a solution to the chronic problem                             
of prison overcrowding in Alaska. Over a decade of gridlock has led to                              
the failure to improve on what was supposed to be a temporary                                       
solution of sending prisoners to Arizona. The result has been the                                   
placement of more and more prisoners into community housing                                         
alternatives and the constant transferring of prisoners between                                     
locations to ensure the integrity of the system, all of which runs the                              
risk of compromising the level of public safety being provided to                                   
Working with the Legislature, we have ended the gridlock. This bill                                 
will give the state the authority to address many needs, including both                             
pretrial and long-term incarceration of criminals across the state. It                              
will give the state the authority to pursue a large facility in the Mat-Su                          
Valley, to reduce prison costs and ease the overcrowding in other                                   
areas. It will allow the state, subject to specified restrictions, to replace                       
the Kodiak jail and the jail in Dillingham. It will also allow the state to                         
expand the Anchorage Correctional Complex, if federal money                                         
becomes available. The expansions authorized in this bill will enhance                              
the level of public safety afforded to the people of Alaska by providing                            
a stable and adequate supply of prison beds to house those criminals                                
who choose to victimize our citizens.                                                               

2004-09-07                     Senate Journal                      Page 3925
And finally, this bill will generate good paying, long-term jobs for                                
Alaskans and end the export of over $14 million per year to Arizona.                                
In addition to my support of finding a solution to the prison                                       
overcrowding, I have consistently advised the Legislature that it                                   
should adopt a long-range fiscal plan for the State of Alaska. I believe                            
the state needs to be on a solid financial footing before it authorizes a                           
program of new borrowing that ultimately relies on the credit of the                                
The state's credit has been under the cloud of a formal negative                                    
outlook by Moody's since August of 2002. The amount of debt                                         
authorized in this bill coupled with a lack of a long-range fiscal plan                             
causes concern, the greatest of which is a potential negative effect on                             
the state's credit rating. A downgrade of the state's credit could cost                             
Alaska communities more each year in added interest. Even with                                      
petroleum revenues and one-time reserves paying state interest costs,                               
Alaskans who pay property taxes to a city with debt, have a student                                 
loan, or have a home mortgage with a state agency would realize                                     
increased costs from a credit downgrade. A credit downgrade would                                   
be much like a hidden tax on Alaskans.                                                              
I have made a commitment to the rating agencies that the state will not                             
incur additional debt until recurring revenues match expenditures. I                                
maintain that commitment and my signature of this bill is not an                                    
indication of our intent to immediately move forward with the $850                                  
million in potential debt authorized in this legislation.                                           
I will still mandate that, before actual bonding or significant debt                                
instruments can be issued, there must be a satisfactory repayment                                   
ability that will not jeopardize the state's AA bond rating. The                                    
responsibility to assure that the credit rating is not put in jeopardy is                           
the joint responsibility of the Legislature and the administration. It is                           
further understood that my administration, including the commissioner                               
of Corrections and the State Bond Committee, will not initiate any                                  
action inconsistent with the state debt policy as articulated by the                                
Office of the Governor.                                                                             

2004-09-07                     Senate Journal                      Page 3926
There are several provisions included in the bill that I will use to                                
ensure my commitment is maintained. First, the bill provides the                                    
Department of Corrections the option to enter into lease-purchase                                   
agreements for new or expanded facilities. There is no mandate.                                     
Second, the authorization remains in effect until 2009. Third, lease-                               
purchase agreements are subject to approval by the state bond                                       
committee made up of the commissioners of Revenue, Commerce, and                                    
Administration and the state bond committee will not approve debt                                   
that will result in a downgrading of the state's credit rating. Fourth, the                         
bill restricts the Department of Correction's authority to sign lease-                              
purchase agreements if any bonds issued for the projects would be                                   
rated below investment grade. Finally, certificates of participation                                
authorized under the bill are restricted if the issuance would lower the                            
state's credit rating and the certificates are rated below investment                               
I look forward to working with the Legislature and Alaskans to                                      
address the long-term fiscal needs of the state and the need to house                               
our prisoners.                                                                                      
Sincerely yours,                                                                                    
Frank H. Murkowski