Palin vs. the GOP

After touring the country this fall as a vice presidential candidate and drawing crowds of enthusiastic Republicans, Gov. Sarah Palin is back in Alaska facing a less friendly audience — some of her fellow GOPers in the Legislature.

Palin released her fiscal 2010 budget proposal Dec. 15, describing the $4.9 billion general fund spending plan as thrifty and prudent.

“The spending plan is based on prudent decisions and fiscal discipline while providing for the safety, health, and education of our citizens, pursuing responsible resource development, and maintaining a stable economy,” she said in a news release.

But Rep. Mike Hawker, R-Anchorage, chairman of the House Ways and Means Committee, urged her to go back to the drawing board and start over again, saying Palin’s budget proposal was based on unrealistic hopes for high oil prices.

Alaska’s budget is almost entirely dependant on oil taxes — and Palin’s budget plan was built on forecasts that oil would be priced at $74.41 per barrel.

“Today, Alaska oil is trading below $30,” Hawker wrote in a letter to Palin released Dec. 19. “Based on your proposed general fund spending of approximately $5 billion, oil prices during the entire fiscal year 2010 have to average somewhere above $65 a barrel to avoid a budget deficit. If oil prices average only $40, we will be facing a deficit of approximately $3 billion.”

Hawker requested that Palin revise her budget proposal. “I will greatly appreciate your providing amendments before the beginning of the legislative session that reasonably reflect world market conditions and their likely consequence on Alaska economics during the 2010 fiscal year,” he wrote.

Lawmakers convene in Juneau on Jan. 20.

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