Spending rose in Palin's Alaska administrations

Alaska Gov. Sarah Palin calls herself a fiscal conservative who wants to "rein in government spending." She says she "reformed the abuses of earmarks in our state." Republican John McCain said during the last debate that his running mate has "cut the size of government."

But Palin didn't cut the size of government as mayor of Wasilla, and she hasn't done so as Alaska's governor, city and state budget records show. Spending in fast-growing Wasilla increased by 55% during her tenure from 1996-2002, records show. In nearly two years as governor, she has presided over a 31% spending hike by a state government that sought earmarks from Washington even as it reaped billions from higher oil prices and Palin-backed tax increases on oil companies.

Bill McAllister, a governor's office spokesman in Alaska, said the state lived through painful budget cuts in the 1990s when low oil prices restricted revenue. "There's an element of catch-up here," he said.

Palin tried to restrain legislative spending, pare back earmark requests and steer money into reserve funds, he said. He acknowledged, however, that Palin had to sign off on numerous pet projects in legislative districts.

"Sure, there are some political realities," McAllister said.

Palin used her line-item veto power to strike nearly half a billion dollars in spending items in 2007 and 2008. Yet she signed bills that included hundreds of millions for local projects inserted by state lawmakers, similar to those McCain has regularly ridiculed as pork in the U.S. Senate, spending records show.

As governor, Palin has signed off on $402,000 to study the arctic fox; $154,000 for renovations to three gun clubs and $125,000 for the Alaska Aviation Heritage Museum, state records show. Her budgets have funded $44,500 to spruce up a ski resort, $75,000 for the Arctic Thunder Air Show and $50,000 to improve a Little League field in the Mat-Su Valley near her hometown of Wasilla.

The Palin administration asked Washington for $197 million in earmarks this year, down from $254 million the year before, according to the state budget office. Appearing last month on ABC's The View, McCain incorrectly said Palin had not sought any earmarks as governor. Earmarks are spending items inserted into bills by legislators.

As mayor she hired a federal lobbyist, made trips to Washington and helped Wasilla win nearly $27 million in earmarked federal funding, according to Taxpayers for Common Sense, a non-partisan watchdog group.

Maria Comella, a spokeswoman for the McCain-Palin campaign, declined to address McCain's misstatements about Palin's record but said in an e-mail that the governor reformed government by "putting every dollar to work in order to strengthen Alaska's rapidly expanding economy and ensure long-term development."

McAllister said Palin reduced her requests for federal earmarks but never promised to stop asking for them.

"I think what she's saying is, the process has been overused," McAllister said.

McCain, by contrast, calls for an end to earmarks.

Alaska's spending bills are split into a capital budget for infrastructure projects and an operating budget that funds salaries and other general government expenses. In Palin's first two years, the state operating budget has increased 31%, and capital spending remained roughly at the same level as the last two years under her predecessor, Republican Frank Murkowski, state records show.

Alaska's capital budget is full of local projects because many local governments rely on state funding to meet basic needs. Most of Alaska is owned by the federal government, and only 25 municipalities levy a property tax, according to the state tax assessor's office. The capital budget, therefore, is a grab bag of projects requested by communities through their state lawmakers.

Because 90% of the state's revenue comes from the oil and gas industry, Alaska has been flush with cash in recent years. State coffers grew fatter still when Palin, with help from Democrats in the Legislature, increased taxes this year by billions on the energy industry.

The Alaska government tends to spend more in good times, said Greg Erickson, an economic consultant in the state capital.

In a newsletter, Democratic Rep. Mike Doogan compared the 2008 budget process to a feeding frenzy by piranhas.

"The legislature is chewing through the financial bonanza brought by higher oil taxes and higher oil prices at a prodigious rate," he said.

Like the Washington earmark process McCain and Palin decry, the Alaska budgeting process is rife with politics and lobbying.

"Local folks generally get their projects by gaining influence with their representatives and their governor and getting it included in the capital budget," Erickson said. "The bigger communities hire well-paid lobbyists."