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Funding has significantly increased in areas where the purpose is restricted by state or federal law:
Federal funds increased by $1 billion since FY1995.
Permanent Fund net income used for dividends and inflation proofing increased from $913 million to $1.8
billion.
Corporate receipts (AHFC, AIDEA, etc.) more than doubled from $75 million to $194 million.

State general fund spending for the K-12 foundation formula and school debt, corrections, public safety and the university has increased since FY1995, although it has not necessarily kept pace with population and inflation.

Even though non-education formula programs such as foster care and Medicaid have increased, the overall level has declined primarily due to the success of welfare reform and the phase out of Longevity Bonus payments.

The burden of budget cuts has fallen primarily on the remaining "other general fund" portion of the budget which has dropped $ 133 million, from 15% to 8% of the total budget.

This narrow area for budget reductions has had a serious impact on basic government functions such as management and protection of our natural resources, senior services and Pioneer Homes, financial management and tax administration, economic development, inspections, commercial regulation, and the maintenance of roads, airports, ports and ferries.

General purpose unrestricted revenue is primarily derived from oil taxes and royalties and is expected to continue trending downward as oil production declines.

Based on very strong financial market performance, Permanent Fund statutory net income has more than doubled from just over $1 billion to the nearly $2.3 billion projected for FY2001.

Federal funding has increased dramatically from $662 million in FY95 to $1.7 billion in FY2001.

Federal funding will account for 25% of total operating expenditures and 77% of capital spending in FY2001.

Dependence on the Constitutional Budget Reserve is expected to continue to increase into the foreseeable future absent any increase in taxes or use of Permanent Fund earnings. Current projections are for the CBR balance to be exhausted in FY2004.

Corporate receipts have become a regular part of the state budget. They fully support the operations of Alaska Housing Finance Corporation, AIDEA and other state corporations. They also contribute significantly to financing general government needs through dividends declared by AHFC and AIDEA or contributions made to funding of projects outside the activities of the corporations themselves.

The proposed general fund budget is $134 million less than in FY1995, even with the governor's proposed FY2001 investments in K-12 education, Smart Start, the University, and Capital Projects.

For years, K-12 education funding grew about 2% per year to match school enrollment but the growth rate is expected to level off as the "echo of the baby boom" generation comes into the school system.

The most dramatic increase in the budget is the growth of the Permanent Fund dividend program. At $1.2 billion for FY2001, it is by far the largest single program expenditure in the state budget.