Under the authority vested in me by Art. III, Secs. 1 and 24 of the Alaska Constitution and AS 37.07.080(f) and (g), I have determined that estimated revenues and unrestricted surpluses in the state treasury available for expenditure for the fiscal year ending June 30, 1987 will be insufficient to provide for existing appropriations. I have made this determination after reviewing the December 1986 forecast of state revenues anticipated for the fiscal year ending June 30, 1987, which estimates a fiscal year 1987 shortfall of approximately $950 million.

On August 22, 1986, Governor Sheffield made a similar finding and issued Administrative Order 90, which withheld from obligation various percentages of certain appropriations. In particular, the commissioner of administration was directed to withhold from obligation 10 percent of the appropriation to school debt retirement. The fiscal year 1987 authorized general fund appropriation for school debt retirement was $144,263,700. The 10 percent restriction would have meant that obligation would be allowed at a 90 percent level, which, if left in force for the entire fiscal year, would mean that $129,837,300 would be obligated by the end of the fiscal year.

The actual total for school debt retirement for fiscal year 1987 has turned out to be $128,716,800. Consequently, the purported withholding of 10 percent of the appropriation from obligation by Administrative Order 90 would have had no impact on school debt retirement. An actual 10 percent restriction on that program would have required withholding an additional $13,992,300, or approximately a 19.7 percent restriction from obligating the original appropriation of $144,263,700.

I conclude that it is in the best interests of the state to further withhold expenditure authority for school debt retirement in a manner that meets the original intention of Administrative Order 90. This reservation of spending authority is necessary to prevent deficit spending which is prohibited unless authorized by law and ratified by the voters pursuant to art. IX, sec. 8 of the Alaska Constitution.

NOW, THEREFORE, IT IS ORDERED:

The Commissioner of Administration is directed to withhold from obligation $28,418,700 of the original appropriation of $144,263,700 to school debt retirement.

This Order takes effect immediately.

Dated this 8th day of December, 1986.

By: S/S Steve Cowper            
Steve Cowper                    
Governor of the State of Alaska