Gov. Sarah Palin offered a plan Thursday for settling differences over the supplemental budget at an open informal meeting with House members that many say was unprecedented.
More than 30 representatives, their staff and the press packed the House speaker's chambers to hear Palin's proposal, which she described as "a better idea than the route that we are on now."
The conflict over last year's capital budget vetoes has ruffled what has been a relatively smooth budget process so far and could build into a stormy showdown between the governor and lawmakers in the final days of the legislative session.
Palin's proposal is to work with lawmakers on developing a two-year spending and savings plan for the 2008 and 2009 fiscal years.
She offered to allocate a specific sum - perhaps $1 million per House district - to cover local districts' requests in the 2009 capital budget.
In return, Palin wants lawmakers to remove the embattled projects from a budget bill that covers current year spending shortfalls and agree to retain at least 80 percent of the state's priorities in next year's capital budget.
"Our intention is to sincerely be working with you on your district priorities but also keeping in mind the overall spending for both operations and capital projects. That's what Alaskans are expecting," Palin said.
The relaxed and convivial meeting took place just before the House was scheduled to vote on the bill - the vote was delayed until Monday - and just a day after the House Finance Committee loaded more capital projects into the supplemental budget on top of those the Senate added earlier.
The governor's appearance at the invitation of House Speaker John Harris, R-Valdez, was in marked contrast to her scolding letter to the Senate sent just an hour before it voted on the same bill last week.
Still it may not be enough to avert a potential show down between the governor and the Legislature should the $4.3 billion supplemental budget pass the House with $70 million worth of once-vetoed capital projects that lawmakers are seeking to restore.
Lawmakers are mixed on the issue but rural lawmakers appear most resistant to moving projects from the supplemental budget to the 2009 capital budget because of the short window of time to ship building materials to remote areas of the state.
While Palin's chief of staff Mike Tibbles suggested that the time difference between the two budgets would only be a couple of weeks, usually that's not the case. The capital budget is often the last piece of legislation to pass in the session and not ready to be signed into law until months later.
Rep. Mary Nelson, D-Bethel, said even projects that survived last year's vetoes still don't have money to get started in her district.
She said further budget delays would leave projects like the Nome public safety center renovations, Yakutat's water and sewer system and beach erosion guards in Shishmareff waiting another year before supplies could be barged in.
Nelson also said inflation - as much as 11 percent in rural areas - isn't factored into each year that a building cycle is missed.