The House unanimously approved a $4.3 billion supplemental budget bill on Monday, but the biggest area of contention may be still in flux.
The measure contains $3.6 billion in savings, $300 million for home weatherization, $125 million for oil producers' tax credits and $180 million for municipal revenue sharing.
It also pays for labor agreements, senior benefits and fuel increases at the marine highway among other items.
However, a relatively small amount - $70 million to restore capital projects vetoed last year - has set lawmakers at loggerheads with Gov. Sarah Palin.
Although the bill passed, the vote was followed by a request for reconsideration, which means it could be brought back later for changes and another vote. House leaders said they want to continue to negotiate with the governor's office.
Palin said her beef is that the supplemental budget - traditionally a spending plan to cover shortfalls in the current budget year - is not the appropriate place for the capital projects.
Last Thursday, she and her chief of staff Mike Tibbles offered to work with House lawmakers on funding their capital priorities in next year's capital budget as long as both parties can agree on an overall spending plan for this year and next.
She suggested allowing each House district $1 million for lawmakers to spend on projects of their own choosing.
House Speaker John Harris, R-Valdez, said the proposal needs more discussion since some projects far outweigh that amount. The Anchorage crime lab alone is estimated to cost $100 million.
"So where do you draw the line? That's the key," said Harris. "How much do you let the Legislature determine what they want to spend themselves and how much, governor, do you say is too much spending overall? You get into an algebraic equation."
Harris said he has asked legislative finance director David Teal to draw up an overall spending plan that he plans to discuss with the governor's office as early as Monday afternoon.
Palin said she is optimistic that an agreement can be reached.
"Since the House gave notice to reconsider its vote, the bill is not yet final. I am hopeful the House will still take us up on the offer to work cooperatively going forward," said Palin in an e-mailed statement to reporters.
Support for keeping the capital projects in the bill has been strong from rural lawmakers because of the short time frame for getting construction supplies to remote areas.
Others voiced ambivalence.
Rep. Mike Doogan, D-Anchorage, said he would vote for the bill because overall "it has a lot of good stuff in it," but added that lawmakers don't need to pick a fight with the governor over a relatively small amount of money.
"I don't think that this bill benefits from that. I don't think that our chances of doing the people's business and leaving here in 90 days benefits from that, and to be honest with you, I wish that section wasn't in this bill," Doogan said.
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