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House weighs in with its capital budget

Muñoz, Kerttula call it good for Juneau

Posted: May 12, 2011 - 9:36pm
Rep. Mike Doogan, D-Anchorage, watches House Finance Committee aide Helen Phillips deliver the House version of the Senate's capital budget bill to the legislator's committee desk Thursday afternoon.   Michael Penn / Juneau Empire
Michael Penn / Juneau Empire
Rep. Mike Doogan, D-Anchorage, watches House Finance Committee aide Helen Phillips deliver the House version of the Senate's capital budget bill to the legislator's committee desk Thursday afternoon.

House Republican leaders rolled out a capital budget that tops $3.1 billion, but is being praised by Juneau’s politically split delegation.

That budget, which contains most of the state’s budget’s large, one-time items such construction projects, has been the sticking point that forced the current special session.

The new movement on the budget means the special legislative session could adjourn by this weekend, some said.

The Senate finally released its hold on the budget after Senate leaders said their fears that Gov. Sean Parnell would use vetoes to retaliate against those senators who refused to pass his oil tax cut had been allayed.

The version of the capital budget rolled out late Thursday contains money for some top priorities of Parnell and House Speaker Mike Chenault, R-Nikiski, such as $400 million to endow Parnell’s higher education scholarships and $200 million for Chenault’s in-state natural gas pipeline proposal.

For Juneau, the budget includes nearly $77 million in broadly supported projects.

Rep. Cathy Muñoz, R-Juneau, praised the budget released by the House Finance Committee co-chairmen Thursday as both conservative and good for Alaska.

“We’re paying off debt, and we’re addressing the governor’s priority of the scholarships and addressing the promise of in-state gas,” Muñoz said.

The merit scholarships Parnell has touted as a way to boost student achievement would cost $8-$20 million a year.

Earnings from the $400 million fund would assure the students who take the tough classes required would get the scholarships even if state revenues had declined by then.

Several of the projects are in Juneau, and address both local and statewide needs. They were also in the version earlier passed by the Senate.

“It’s a really good capital budget for Juneau, we’ve got a lot of good projects in it we’ve needed for a long time,” said Rep. Beth Kerttula, D-Juneau, and House Minority Leader.

Among a host of projects: $5 million for Auke Bay Harbor improvements, $1 million for airport snow removal equipment, and tens of millions for highway and bridge improvements.

A key statewide project located in Juneau, they said, was $5 million in additional funding for the state Library, Archives and Museum facility now being designed.

The highway projects alone, which will include the Brotherhood Bridge, Glacier Highway and Fritz Cove Road rehabilitation and replacement, will keep people working, Muñoz said.

“We will have construction crews that will be really busy in the next couple of construction seasons,” Muñoz said.

One last minute change: An effective date clause was changed to May 17, said James Armstrong, aide to Rep. Bill Stoltze, R-Chugiak, co-chairman of the House Finance Committee responsible for the capital budget.

That was done for one section of the bill “So they can start some of these projects earlier,” he said.

The bill also restores money for the controversial Goose Creek Prison, which expects big operational cost increases.

The Senate version of the bill only included enough money to mothball the facility. The House version adds enough money to begin using it on a trial bases.

That will be done with a small contingent of minimum-security prisons in an effort to discover any bugs in the buildings while they’re still under the builder’s warranty, said Karen Rehfeld, director of Parnell’s Office of Management and Budget.

Rep. Mark Neuman, R-Big Lake, said he supported the extra money.

“They do need to go forward with the soft opening in this, to make sure the warranties are up and running,” he said.

Potential controversy may come from he $200 million gas pipeline appropriation, coming in advance of studies on the economics of a small-diameter, in-state natural gas pipeline that are due this summer.

Muñoz said she supported the appropriation, even though it would not directly benefit Juneau.

“To be able to bring gas to Alaskans along the Railbelt is a statewide priority,” she said.

“I definitely support the effort to develop lower-cost energy throughout Alaska,” she said.

Rep. Les Gara, D-Anchorage, said a small line was not the way to do that.

Studies done so far for the Alaska Gasline Inducement Act interstate pipeline and others show that only a big pipeline can have the economies of scale to bring Anchorage consumers cheap gas, he said.

Some of the studies show natural gas prices in Anchorage tripling, to $21 for a thousand cubic feet, he said, for the multi-year life of the gas contracts. And because Alaska doesn’t tax in-state gas it means it wouldn’t bring in needed revenue for state government either.

“If we obligate consumers to $21 gas in an in-state line, and then the big line is built, consumers will have to watch cheaper gas go right by their homes, because they’ll be obligated, for at least 20 years, to pay for the gas in the high-cost in-state line,” Gara said.

The new version of the capital budget, Senate Bill 46, was rolled out late Thursday afternoon, and an evening meeting to consider amendments was cancelled at the last minute.

Action on the capital budget is now expected Friday, with two remaining active bills nearing resolution in the Senate.

Muñoz said that leaves the Legislature poised to conclude its special session as soon as Saturday, three days before the end of its allotted 30 days.

• Contact reporter Pat Forgey at 586-4816 or at patrick.forgey@juneauempire.com.

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