Gov: Takes Action on Budgets

By Dave Donaldson

Governor Parnell on Wednesday had his input into the operating and capital projects budgets  that came out of the legislature this year.   

He approved using $11.4-Billion – $6.9-Billion in state money.  But that’s after cutting $403-million  from the capital expenses the legislature wanted – bringing the entire spending for the session within limits he is comfortable in approving.  He said the operating budget was limited to a two point nine percent growth – and no operating elements were vetoed.

Much of the operating budget was driven by statutory formulas.  The budget that’s we’re releasing right now fully funds those legal obligations, including a mandated increase to the kindergarten through twelfth grade formula,  the Medicaid formula cost, retirement system costs – including the state’s unfunded pension liability.  It addresses our debt service cost and our employee contracts.

The $2.8-Billion capital budget was heavy on energy projects.   It adds $400-million to the Power Cost Equalization Fund,  more than $110-million for hydro projects.   He also allowed $36-million  for Renewable Energy grants, more than $100-million for weatherization and home rebates and $12-million for a geothermal project at Mount Spurr.

He did refuse to give the entire $18-million the legislature wanted for the Mt Spurr project,  and he vetoed$10-million for the Homer Natural Gas pipeline.

The capital budget had drawn concern at the end of the session when Parnell threatened using his veto power as retribution against members who didn’t support his oil tax proposal.  That comment led to the first special legislative session this year as the Senate refused to pass a budget bill until the governor assured members that veto decisions would be based on the merits of the expenditures.   Bethel – home of Senate Finance Co-Chair Lyman Hoffman – sustained more than $30-million in cuts.  But Parnell says there was no retaliation – and that shows up in the regional balance in the budget.  And, he says, Bethel did very well overall.

They wound up with more than any other district, and so the cuts to that district I believe still leave them with the highest per capita spending in the state.  What that district has that’s very important to them includes a new school in Napaskiak,  it includes a pre-maternal hom e in Bethel, it includes the Quinahak school in that District as well.  So,  there are some major projects in that district.

In Bethel, the governor did veto $3.5-million toward an administrative building for the Association of Village Countil Presidents,  and $2.5-million for a campus water and sewer line.

The governor said the purpose of the vetoes – $700-million in the past two years – is to prepare to pay off on the unfunded pension liability that will one day become due.  It will also prepare the state if the economy begins to sink.

Right now, he says,  the state has $15-Billion in savings – and, he says,  the legislature can get more freedom in spending if the executive and legislative branches agree on spending limits.

However,  he said,  the legislature will not get complete freedom.

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