TO: MAYOR AND HOMER CITY COUNCIL

FROM: COUNCILMAN DOUG STARK

DATE: 30 March 2003 for Council Meeting of 14 April 2003

SUBJECT: State Budget Cutbacks

The Mayor and some Councilpersons indicated at the last meeting that they would like to see a resolution at this meeting to ask the State for more revenue sharing than the Governor proposes. I think that is an inappropriate idea for the following reasons:

1. The State has a financial crisis. The Governor's fiscal plan to solve it is to spend less, increase income, and grow the economy. With a projected shrinking deficit we can reach a balanced budget before our Constitutional Budget Reserve runs dry. Achieving this goal requires the cooperation and sacrifice of all of us. It also means that any reduction of the proposed saving this year be matched by an equivalent saving elsewhere in the budget. The Governor has the red pen and he intends to use it to reach his budget target.

2. 1 talked to Senator Gary Stevens after the Council unanimously defeated Resolution 03-41 and he thanked me and the Council for defeating it. I also talked to Representative Paul Seaton and he confirmed that the Governor insists on a maximum draw on the CBR as outlined in his budget address and that he will veto any funding in excess of this.

3. The City of Homer needs to help solve the problem, not ask for a handout that won't happen. It is important that we maintain good relations with the state administration. Our most likely help will come from well-documented project requests.

RECOMMENDATION: No action on request for general state support.