Dispute Over Capital Projects

By Dave Donaldson

A dispute is already developing this year over the amount of spending that will appear in the capital projects budget now in the House and Senate Finance Committees. 

Senate President Gary Stevens says Governor Parnell has told members they should limit the amount of money spent on their projects to $100-million this year.  That has been about the average amount spent in recent years when state revenue has been tight.  But Stevens says the Senate does not share the intention to honor that limit.  He says while members respect the governor and some of the administration’s large capital needs,  Parnell is not recognizing last year’s budget that set aside money for savings — but none at all for legislative projects.

The understanding and the promise, in a way,  was that this year there would be capital projects.  So as you talk to senators and representatives, you learn that they all have projects at home that were not done in their communities that need to be done,  good projects that effect people in all of our communities.   So there’s a difference of opinion as to what that dollar amount should be.

He says the state’s people were effected by last year’s action, and most members this year would like to see four or five times the amount the governor wants.

Governor Parnell says he anticipates dialog over the exact amounts of the budget,  but he wants restraint in spending while saving still more for the future.  He says his projects total $300-million,  and he’s set aside room for a $400-million total — but to say those numbers are fixed is a “mischaracterization.”

Overall spending is the issue here.  And for me,  if I’m looking at an overall general fund budget in the three to four hundred million dollar range, and we’re looking at a finance package for buildings,  that’s what I’m looking at.  And what it does is it leaves surplus in savings for the future.  So, it’s all on the table for discussion in that way.

Finance Co-Chair Bert Stedman says there’s plenty of money for communities’ projects.  He says there’s room to work in as the state anticipates a $700-million surplus this current fiscal year — and another $300-million for next year.  And Lyman Hoffman, the other Finance Co-chair,  says it’s obvious that legislators aren’t spendthrifts — they have about $10-Billion in various savings accounts already.

Majority Leader Johnny Ellis says the public sees the economy as getting soft,  and legislative spending is needed where it counts.

You could look at a capital budget,  an early capital budget as a jobs package, a jobs bill that, if I had my way,  would include a lot of deferred maintenance.  I think we can come together with the governor on that … in a good way.  The governor,  if he’s talking about a four hundred million dollar capital budget and he’s deciding on the agency requests for about three hundred million dollars of that,   I think I woujld behoove us and go through those agency projects and decide which agency projects can be afforded and which community projects would be better job generators.

Ellis says that putting three quarters of the budget toward agency capital requests — and only $100-million to local needs — is out of balance.

The budgets are in both the House and Senate Finance Committees,  but final action will not likely come until near the end of the session in April.


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