Senate passes capital budget

After week of delay, senators claim victory and give Gov. Parnell much of what he sought

The Alaska Senate Tuesday broke the legislative deadlock that forced a special session and consumed its first three weeks by passing to the House of Representatives a $2.8 billion capital budget.

Sen. Bert Stedman, R-Sitka, said they had little choice if they wanted to protect the state’s economy.

“We have a jobless recovery and need to get these projects on the street so Alaskans can go to work,” the co-chairman of the Senate Finance Committee said.

The capital budget appears to give Gov. Sean Parnell much of what he wants. While it still includes the contingency language grouping $450 million in energy projects together in an effort to prevent a veto, that language is unlikely to survive the House of Representatives.

Late Tuesday, Senate President Gary Stevens, R-Kodiak, indicated the Senate was no longer wedded to the language it had once insisted upon.

He said Parnell had opened the door to a deal by backing off what the Senate saw as a veto threat.

“He’s come a long way,” Stevens told reporters after passage of the budget.

Stevens said the Senate had received “assurances” that Parnell will not be vindictive with his veto pen, retaliating against those legislators who balked at passing the huge oil tax reductions Parnell sought.

Those assurances came in comments from Parnell to the press, Stevens said.

The Senate’s multi-week delay and forcing a special session will serve to highlight the Senate’s reasons for the actions it took, he said.

“Certainly now enormous attention will be paid to any energy project the governor chooses to veto,” Stevens said.
Sen. Bert Stedman, R-Sitka, said the $450 million in energy projects were intended as a package to balance needs of communities all around the state. The energy projects are focused on reducing energy costs for Alaskans, he said.
One local energy project is $2 million to Alaska Electric Light & Power for avalanche mitigation on the Snettisham Hydroelectric Plant’s transmission line. Other projects around Southeast include electrical interities, wood-fired boilers and hydroelectric dams. 

“This capital budget is the state’s energy policy in action,” said Sen. Joe Paskvan, D-Fairbanks, in Senate floor debate.
A major highlight of the budget, Stedman said, was to use the state’s current budget surplus to pay down existing bond debt, as well as paying cash for additional projects in the state’s 2008 bond package for which bonds have yet to be issued.

Most of the projects are intended to reduce energy costs with new renewable low-cost projects, electrical transmission lines or other efficiency measures.

It also adds money to the Low Income Heating Energy Assistance Program known as LiHeap to backfill possible federal budget cuts due to the federal government’s current financial straits.

Another victory for Parnell in the budget is adding money into a current saving account, bringing it to $400 million, so it can be used for a long-term funding for the performance scholarship plan Parnell has long sought.

Before passage, the Senate, along caucus lines, voted down minority Republicans’ budget amendments to boost
spending on tourism advertising and in-state natural gas, as well as an attempt to remove the contingency language.

Sen. John Coghill, R-North Pole, said he doubted the legal basis for the contingency language, but said it should be removed even if it would withstand a court challenge because it was the wrong way to deal with a conflict within state government.

“If it is legal, it’s still the wrong thing to do,” Coghill said.

All the amendments were voted down 13-3.

The breakthrough came after the House began its own surprise hearings on the capital budget Tuesday, something it had declined to do for weeks. The House received the capital budget from the Senate late Tuesday, and plans a day of public testimony on it. Today’s action means the Legislature should now be able to meet next week’s 30-day special session deadline.

• Contact reporter Pat Forgey at 586-4816 or at


  • Switchboard: 907-586-3740
  • Circulation and Delivery: 907-586-3740
  • Newsroom Fax: 907-586-9097
  • Business Fax: 907-586-9097
  • Accounts Receivable: 907-523-2230
  • View the Staff Directory
  • or Send feedback