JANIE LEASK: Thank you, Governor, and thank you, Cheryl. I have several questions here, you all know I am not going to get to all of these because of the time.

A couple of them do focus on the federal funding and transportation. So the first one is how much money for the bridges is state money and how much is federal money?

CHERYL FRASCA: The numbers that the Governor referenced were the -- was the federal funds and then in addition we have -- we're in discussions with the Department of Transportation, is it a 10 percent match or a 20 percent match. Bridges require 20 percent, if it's a national highway it's 10 percent, they're saying this is a national highway. But we have about 18 million in our general fund match pot for the bridges, between the two of 'em.

GOVERNOR MURKOWSKI: Maybe we could work this (indiscernible - simultaneous speech).....

MS. LEASK: Yeah, I was gonna say maybe you should just -- yeah, just stand up here and we can work it a little bit faster.

With the expected decline in federal funding, what are your thoughts, focusing transportation dollars on the proposed Seward/Glenn Highway connection as a sensible first step toward building the Anchorage infrastructure to handle the Knik Arm bridge in the future?

GOVERNOR MURKOWSKI: Well, I think the legislature's got to have something to do, we're gonna save that for them.

MS. LEASK: Okay.

GOVERNOR MURKOWSKI: (Indiscernible - away from microphone).....

MS. LEASK: I might be able to get through all of these. In light of the extensive real needs in rural Alaska for basic transportation, infrastructure, why not drop the big bridges and meet those real rural infrastructure needs that would reduce the cost of living for a number of remote, rural communities?

GOVERNOR MURKOWSKI: Well, you know, that's a legitimate question and the legitimate needs in Alaska are all over. And, you know, whether you think you're entitled to a road to an airport in Ketchikan or you're the largest city in the state is entitled to have someplace to grow relative to the potential offered by Point MacKenzie. And I -- you know, you don't want to pit communities against communities, you have to look at the overall good. Anchorage is going to continue to be the hub of economic, financial and transportation activities in the state of Alaska.

I think we have to look more towards what we can do to create private sector development in rural Alaska and we've got some pretty good prospects. Mining is not bad, look at what mining did to northwestern Alaska with Red Dog. If we can get Donlin Creek open, what do we need there, we need power. And, you know, there's some exciting prospects around.

And, you know, you have people in transition, a lot of the rural residents move about, a lot of them move to Anchorage, a lot of 'em move to Fairbanks, a lot of 'em wanna stay where they are. And, you know, there's a certain choice in lifestyle associated with it. So again that's what legislators are for.

MS. LEASK: A very simply put question, but maybe a not so simple answer is why not just pay off the state debt?

GOVERNOR MURKOWSKI: Well, that's certainly a reasonable alternative and we have been fortunate in getting a relatively low rate of interest and I think that question is just a matter of addressing where the priorities are. I mean, by savings that means we're not spending, the saving's 400 million by putting it in the pipeline. You can argue whether that's legitimate. Forward funding education, 565 million. Is that legitimate because we're basically taking last year's surplus, forward funding it makes it obviously easier for the teachers to know whether they're gonna get a pink slip. But it's something we could do, we could pay off the debt. Obviously we can't charge it off our income tax like you can your mortgage, but maybe you have a view, Cheryl, for paying off our debt?

MS. FRASCA: Thanks a lot. Well, I mean, the interesting thing in fiscal policy the idea behind debt or like general obligation debt has been the users pay for the benefit over a period of time. You know, you as taxpayers here in Anchorage, property taxes, you approve a bond, it gets sold, that debt gets paid off over a period of time and you have the benefit of that facility or that improvement. So that's the fiscal policy part of it. We don't have a lot of taxpayers here in Alaska so it's sort of has a little hiccup, but that's the idea behind it.

But my guess, we have a hard enough time getting maintenance money to take care of facilities because there's not a lot of ribbon cuttings for those. So I have a hunch there might not be a lot of support to spend hundreds of millions for something else that you don't get to have a ribbon cutting for. So.....

GOVERNOR MURKOWSKI: (Indiscernible - away from microphone).....

MS. LEASK: Can we do the final one here on, this is a lot about education. As you work to increase funding for education, is it time to build an endowment for the university, is it time to fund more pre-kindergarten programs, is it time to offer vouchers to support school choice for parents?

GOVERNOR MURKOWSKI: You know, everybody has their views on education and I think you have to rely on professionals and we have a lot of professionals in education as well. I've been very confident in the selection of the Commissioner of Education, Sampson, I think he has an extraordinary balance. When we first interviewed, the discussion was -- you know, we've raised six kids and some of 'em are pretty good students and some could have been a little better, but nevertheless his philosophy of education struck me as very simple, very understanding, and it was that young people would be put in an environment where they would be goal oriented. They would in other words set a goal for a three month period of time and then they would try and achieve the goal that they set.

And what that meant to me was that everybody learns at a little different rate, but you achieve a significant capability when you're through. Somebody might do it a little sooner, but it addresses the question well, gee, some kids gets out of school and they can't read. If you can't read you can't get a job. And that is fundamentally, I think, and he could go on and there are educator's much more qualified than I, but very simply put I think that's where the emphasis starts in our educational system as we address the motivation of children to try and get them goal oriented so they take pride in achieving the goal that they've set. And it's a meaningful goal, it's a monitored goal, you receive assistance and when they're through they have a fair shot with everybody else, maybe perhaps a brighter student. Do you agree with that?

MS. LEASK: Okay. Thank you, again, Governor,.....

GOVERNOR MURKOWSKI: You bet. Thank you.

MS. LEASK: .....and Cheryl. We do have some holiday chocolates for each one of you.

GOVERNOR MURKOWSKI: Is there enough to go around?

MS. LEASK: No. In closing, if you are a guest here, joining us here today, we welcome you, there's information about our organization at the door, we encourage your membership. We'd like to thank the Alaska Railroad again and we are adjourned. Merry Christmas and have a very safe holiday.

(END OF PROCEEDINGS)