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Meyer wants to finish started projects

Posted: January 30, 2013 - 1:01am

JUNEAU — A co-chair of the Senate Finance Committee said Tuesday that he would like the state to finish capital projects before funding new ones.

Sen. Kevin Meyer, R-Anchorage, told reporters that is his own goal and said he hasn’t spoken with the House Finance co-chair or Senate colleagues about it.

The Legislative Finance Division, in an overview of Gov. Sean Parnell’s budget proposal for next fiscal year, said partial funding of projects, something that has been done in recent years, “may come back to haunt” the governor and future legislators.

The report said partial funding can increase project costs “by adding uncertainty to project management and by splitting the bidding process.” It said the approach also can limit discretion for future spending because part of the money available in any given year will be tagged for projects already under way.

Leaders of both the House and Senate have said they want to rein in spending amid continued forecasts of declining oil production and current spending levels that many deem to be unsustainable. Alaska relies heavily on oil revenues to run.

Meyer said he doesn’t know how much money will be available for a capital budget this year, depending on how much is spent on the operating side. Parnell has proposed a $1.8 billion plan, $1.1 billion less than last year, leaving room for legislators to make some additions or changes. Parnell has called on legislators to agree to an overall spending limit but hasn’t yet specified one publicly.

Meyer said there may be some willingness to use savings to supplement the capital budget if the state gets commitments that oil companies will increase production in the near term. He said if lawmakers could see in the next three to five years that there is going to be 20,000 to 40,000 additional barrels of oil in the pipeline, he personally would be more amendable to dipping into savings for the budget, “knowing that we have this other revenue coming in down the road.”

Parnell has proposed an overhaul to the state’s oil tax structure as a way to encourage new production.

Sen. Pete Kelly, R-Fairbanks, and Meyer’s co-chair on finance, said lawmakers will have to spend money on issues, like helping to solve energy concerns for Fairbanks and rural Alaska, “regardless of our situation right now.” He said that will probably mean dipping into savings at some point.

Kelly said he is grateful for the work that has been done to build up Alaska’s savings accounts. He said he thinks there is an early consensus that a budget crisis is coming and said lawmakers want to be smart about their spending decisions now.

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