Gov. Parnell Presents 2011 Budget

Governor Parnell today (Monday) gave the public its first look at the budget that will be before the legislature during next year’s session.  He is proposing to spend four-point Seven Billion dollars in state general funds on operating expenses,  and three hundred nine million dollars on capital projects.  

In presenting the plan to the Anchorage Chamber of Commerce,  the governor said he plans to follow the priorities of public safety,  education and transportation.

First we’re going to maintain budget discipline by limiting state agency growth, Second, we’re going to focus on results for Alaskans.  And third, we’re going to take the long term view.  We’re not in this for the short term as Alaskans,  we’re in this for our future.  So how does this budget compare to last year’s.  I get to tell you straight up,  This budget leaves a surplus in savings when we’re done,  and is higher  than last year’s budget.

Parnell repeated priorities he has already outlined in previous statements.    He will increase funding for education,  include money for a merit-based scholarship program for high school graduates, increase the number of public safety officers,  continue revenue sharing for the state’s municipalities,  build a crime lab,  provide major maintenance for the Dalton Highway and build a road to Umiat,  And with it all,  the governor says there’s still money to save.

Just last week, the state’s revenue forecast was announced.  And we anticipate having a surplus in the current fiscal year and a surplus in 2011.  That’s because the price of oil went up from last year.  $1.56-Billion in revenue expected in 2010, and $1.36-Billion for 2011 than projected last spring.  That surplus means we will not have to draw on our savings in 2010 or 2011.  But it does not mean we should wildly spend more money.  Instead we should save most of this surplus.

In a meeting with reporters following his speech,  Parnell admitted that he expects the budget numbers to change during the legislative session.  He says it’s the nature of the legislature.    For the capital budget, for example,  Parnell  says he received one point nine Billion dollars in requests for local projects.  And he approved only three hundred nine million.

I need to leave room for legislators to fight for their districts and to work with them in this legislative process.   That’s what this budget is designed to do. And you’re going to see those kinds of projects all around the state.  There are important projects that are priorities for me and for legislators,  but that’s a part of the ongoing discussion for the session.

It’s premature to forecast what the governor’s budget will look like when the session ends next year.   But House Finance Co-chair Mike Hawker says it’s a luxury to have enough money to spend all you want and to save some, too.   He does say the governor has laid out clear objectives and provides the foundation for a discussion of the relationship between the state’s priorities and resources.

I think the backdrop to the entire budget conversation this year is going to be a discussion of how can we sustain the level of expenditure of the this state that we have reached in the face of the accelerating rate of production decline in our major oil fields.   That backdrop is going to be a very critical part of the conversations this year.

The budget will be formally introduced at the start of the session that begins January nineteenth.


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