Parnell talks spending, oil, role of feds in address to conservative cruise

JUNEAU — Alaska Gov. Sean Parnell said the state will take a close look at whether it should pick up the slack by funding programs the federal government reduces spending on.

Parnell told the Conservative Political Action Conference Monday that the state’s automatic assumption has been to use its own money to cover any funding gaps. But he said the state needs to ask itself whether it’s worth putting its own money toward certain programs if the federal government doesn’t deem them worth funding.

Afterward, he didn’t give any specific examples but said his administration will review “every federal reduction” to see how the state should respond. With Congress looking to cut spending amid a soaring national deficit and the state facing financial concerns of its own “we have to look at ways to do things differently, to lower our spending, to make is more sustainable,” Parnell said.

“And the federal government, in choosing to cut programs, gives us a real opportunity to consider that,” he said.

While the state is far better financial situation than many others, with budget reserves in the billions of dollars, it also faces significant challenges, including rising Medicaid costs, huge unfunded pension liabilities, declining oil production and likely declining federal funding.

The state has relied heavily on oil revenues and federal funds to run, and Parnell has repeatedly stressed the need for the state to live within its means while still trying to make investments in its future.

Parnell addressed the conference cruise when it stopped in Juneau Monday. Other featured speakers during the weeklong cruise of Alaska’s Inside Passage include former U.S. Defense Secretary Donald Rumsfeld and Grover Norquist, president of Americans for Tax Reform. Both men were among the roughly 40 people gathered to hear Parnell Monday.

The boat remained on the water, and Parnell avoided use of a cruise ship tender to reach it. On the docks, a small group had gathered for an informational picket line in support of longshoremen over the alleged non-use of union members by cruise lines that visit the state.

The cruise is sponsored by the American Conservative Union; theteaparty.net; Americans for Tax Reform; and the Washington Times. It left Seattle on Saturday.

Parnell stuck to familiar themes during his speech and a question-and-answer session, talking about how his administration is pushing back against the federal government in areas where it believes it is overstepping its bounds and his belief that the state could better stand on its own — without as much federal help — if it were allowed to develop more of its resources. (Most land in Alaska is federally controlled.)

He also spoke about his plan to lower oil taxes as a way to boost investment and production. In an interview later, he said he plans to keep pushing the proposal, which stalled in the Senate earlier this year.

He said he’s open to changes in the tax-cut proposal he’s put forward if it helps Alaska reach his goal of having 1 million barrels of oil flow through the trans-Alaska pipeline within a decade. He said he has yet to see his critics come up with any such alternative.

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