Session Gets Underway

By Dave Donaldson

Day One of this year’s ninety day legislative session (Tuesday) passed quietly,  mostly with ceremony and formalities that have to be dealt with.   Presiding officers read new legislation into the record and made committee reassignments as members prepared for a reception this evening at the governor’s house. 

For those who wanted a little more substance,  lawmakers had their first look at their own staff’s analysis of the budget that Governor Parnell proposed last month.   The one hundred sixty eight pages of charts, numbers and explanations  began without pulling any punches.   The report points to ten Billion dollars in readily available cash held in reserve right now.  And it highlights expected revenue surpluses for this current year and next.  However, the report also points to concerns about the long-term future — particularly declines in oil production, volatile prices and uncertainty of the development of a gas line.   The bottom line is the often-stated fear that current budget expenditures may not be sustainable.

House Speaker Mike Chenault told reporters this morning that he expects a serious effort to control spending.  He says the conversations haven’t taken place yet on what sort of savings they can find.  Although he is aware of those huge savings, he says he’s still concerned about spending.

We’re probably the envy of most other states in the nation.  But we also know that if oil was to drop to forty dollars a barrel, it would take probably a year or two before we would be in the position where we had no money in the account again and we might be looking at taxes or some other form of revenue to keep the government going.   So, there is concern there, and the dollars that we save — whether they be in capital or whether they be in operating — those are real dollars and we need to be accountable for them.

The Senate is working toward the same goal.  Finance Co-chair Bert Stedman says lawmakers saved money last year — even after oil prices dropped from record highs.   Part of that was due to excluding from the budget most capital projects that provide infrastructure for local communities. This year,  he says the capital budget is back — but so is a desire to save.

Two areas I have concerns on is the growth in the operating account, which is different from the capital budget. That’s your agency growth.  And the reduction in volume down the TransAlaska Pipeline, which generates our revenue.   The capital budget around the state can go from extremely high to very, very low on the whim of the legislature,  and will respond in strong revenue years.  We’ll have a strong capital budget.  And in weak revenue years we should have  miniscule capital budgets.   We have to make sure our savings stretch past 2020 –which I think we’re getting close to being able to do

Committee meetings will begin tomorrow (Wednesday) and Governor Parnell will present his view of priorities with his State of the State speech to a joint session tomorrow night.

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