Sunday, December 07, 2008

Alaska Newspaper Worried About Palin's $5 Million for Needy Kids; No Problem with $800 Billion for Corporations

Cross posted at The Next Right

Like a stern, never pleased step-father, the Anchorage Daily News continues to have problems with Alaska Gov. Sarah Palin–even when she plans to expand health care for needy children.

The Anchorage Daily News taps its foot disapprovingly at Palin’s plan to raise state spending on children’s health insurance and other children’s programs by $5 million. Reporter Sean Cockerham questions Palin about where the additional $5 million will come from given falling oil prices.

“Gov. Sarah Palin is calling for $5 million more in state spending on children's health insurance, preschool and other programs, even as Alaska oil prices and state revenues plunge.

“Cash flow into the state is shrinking as oil prices drop below $40 a barrel, the lowest level in nearly four years. Most state general fund money comes from taxes and royalties the state makes from oil. But Palin said the state can afford more than $5 million in new spending on areas like Head Start, obesity prevention, a test program of half-day preschool, and expanded Denali KidCare insurance.”

Reporter Cockerham worries whether Alaska’s economic situation is up to meeting Palin’s proposed $5 million increase for health care and other programs for kids.
“[Palin] downplayed the danger falling oil prices pose to the state budget, saying Alaska is in a far better position than other states.”

What Cockerham leaves out is the evidence that Alaska is, indeed, in a far better position than other states and does have significant financial reserves.

A recent "massive budget surplus" in the billions leaves Alaska in a much more positive position than the majority of states. (Including my own which is projecting a $1.3 billion shortfall in the 2009-11 biennium.)

Anchorage Daily News concern over fiscal responsibility in Gov. Palin’s $5 million dollar budget increase proposal was not evident in its October 1 story on the $800 billion dollar federal bailout legislation.

That spending bill passed by the Senate was called “historic,” and even though “controversial” backed by a “strong bipartisan majority.” The report noted that Alaska’s two US senators, Ted Stevens and Lisa Murkowski, voted for the bailout package. But there were no questions, tough or otherwise, put to Alaska’s two senators about where the bailout money would come from in an ailing economy. Stevens is only quoted regarding how dire the need for the bailout is.

“Stevens said: ‘On Monday alone, our Permanent Fund has lost over a billion dollars. Alaskans will be unable to borrow to finance a home, a car, or withdraw funds from our savings accounts should there be a further credit market meltdown. Our seniors will lose the retirement income they rely on to pay monthly bills and retirement accounts for future retirees will plummet in value. I was told by one Alaskan senior that he lost $40,000 in retirement savings during Monday's record setting drop.’”

Comparing the $800 billion bailout package which is .32 (or about 1/3rd) of total expected 2008 U.S. revenue (estimated at $2.5 trillion) and $5 million kids insurance budget increase in Alaska which is .0004 (or about 4/one hundredths of a percent) of total expected 2008 Alaska receipts (estimated at $13.5 billion).

Giving a little perspective, the average family income in the US is about $50,000. The federal bailout package would be equivalent to risking $16,000 out of an average annual income. Gov. Palin’s $5 million increase would be equivalent to risking $18.50 out of an average annual income.

The Anchorage Daily News and Cockerham’s snit over this is equivalent to throwing a fit over $18.50 of an average family's income--$18.50 that will go to help needy children in a time of economic crisis that especially impacts poorer families. But no problem with the $800 billion bailout package.

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