Education, gas line top governor's funding list

Murkowski's plan spends most of state's expected surplus from oil revenues

Posted: Friday, January 13, 2006

Gov. Frank Murkowski's State of the Budget address Thursday pitched several proposals he will push for this session, including ownership in the trans-Alaska oil pipeline.

Murkowski said the biggest items in his budget, though, would go toward future education funding and a down payment on a $20 billion natural gas pipeline his administration proposes to build with North Slope oil producers.

The budget would spend $3.62 billion from the general fund, some $500 million more than last year because of a major increase in oil revenues.

The governor spent a chunk of his hour-and-20-minute speech recapping accomplishments of his administration over the last four years, which led legislators on both sides of the aisle to speculate on his ambitions to run for re-election.

"If you want my opinion, I think he's a candidate," said House Speaker John Harris, R-Valdez. The governor will announce his plans later this month, according to his staff.

Murkowski said talks already have begun with Trans Alaska Pipeline System owners on the state carving out its share of the oil pipeline, and there is some interest from the other side.

"Our team negotiating the gas pipeline will pursue this once they are done with their current work and are available to negotiate oil pipeline ownership," Murkowski said.

Rep. Beth Kerttula, D-Juneau, said that proposal could be a bad idea, considering the pipeline's aging infrastructure and that owning a minority stake would not give the state much control.

Harris said the idea is worth looking at, but he will wait to look closer at the proposal before forming an opinion.

Republicans and Democrats this session share the same goal to save about half of the expected $1.2 billion surplus coming from increased oil revenues. Considering that the governor's budget spends almost all of that, the lawmakers will try to make some cuts to his plan this spring.

"It was a long, long, long, long laundry list of spending ideas," said Sen. Kim Elton, D-Juneau, adding it will be a challenge to make room for savings.

One possible item that could be cut out of the governor's plan may be his $400 million set-aside for an equity share in the natural gas pipeline.

"Don't spend gas money before gas is moving down the pipeline," said House Minority Leader Rep. Ethan Berkowitz, D-Anchorage.

House and Senate members said they may allocate dollars for future education funding again as they did it last year, but it may be unlikely they will set aside that the $565 million the governor is requesting.

In his speech, Murkowski also said his administration and the Department of Environmental Conservation will retain the current regulatory prohibition on mixing zones in salmon spawning areas, instead of seeking exceptions for groups on a case-by-case basis.

Some $1.3 billion would be spent on statewide transportation needs, with $873 million of federal funds paying for the costs. Those projects include funding for two controversial bridges and a number of projects to relieve traffic congestion in the Anchorage area.

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