Lawmakers vote to stick with $70 million in capital projects

Posted: Wednesday, March 19, 2008

It's Gov. Sarah Palin's turn now.

Lawmakers on Tuesday sent her a beefy $4.3 billion supplemental budget bill that included $70 million worth of capital projects that she vetoed last summer and could very well reject again through line-item strikes.

The House passed the measure 38-1 following a meeting between House Speaker John Harris, R-Valdez, and Palin's Chief of Staff Mike Tibbles that failed to produce an agreement over the much-debated capital projects.

The Senate then concurred with the House changes 15-5.

Palin will have just over two weeks once the bill reaches her desk to decide whether to allow any or all of the projects to remain. She gave little indication what her decision will be.

"As I consider options to deal with a growing capital project list that has been placed in the supplemental budget, I recognize we are spending other people's money. That's a responsibility I take seriously in determining a fair and appropriate budget process," said Palin in an e-mailed statement to reporters.

Palin said the issue was neither a political battle of wills nor was it personal.

Though she offered lawmakers a deal on the 2009 capital budget if they would agree to remove the projects from the 2008 spending bill, Harris said a majority of the House and Senate were unwilling to accept her terms.

"It wasn't worth my time and the leadership's time to buck the tide. This process will continue and we will move forward," said Harris.

Palin and lawmakers have been at odds over the placement of the projects in a bill that is traditionally reserved for spending shortfalls for the current year's budget.

But then not much is traditional about the 2008 supplemental budget.

For one, it's packed with billions of dollars in savings: $2.6 billion for the Constitutional Budget Reserve Fund, which requires three-quarter vote from lawmakers to access, and $1 billion for the Statutory Budget Reserve Fund, which only requires a majority vote.

It would be the single largest amount set aside for savings in the state's history, an appropriation that could grow even larger by the end of the year as money continues to flood state coffers from high oil prices and a new oil production tax.

The bill also contains development incentives for oil producers, energy efficiency rebates for homeowners and long term assistance to communities.

Despite its complexity, the bill had a remarkably charmed life until the Senate added $50 million in capital projects. Then the House piled on $20 million more.

It was their response to the governor's vetoes of communities' and school districts' priorities, lawmakers said.

Palin said the cuts were necessary because last year's capital budget was too big.

But lawmakers said her vetoes were arbitrary and done without warning. Rural lawmakers didn't back Palin's proposal to add the projects into the 2009 budget. They have been particularly concerned about the soaring costs that result with the loss of each construction season.

While Palin has voiced support for other major items in the budget, she could exercise her line item veto on the capital projects.

If that happens, lawmakers could try to override the vetoes. They also could restore the items in the 2009 capital budget.

"The governor will have an opportunity to veto items she doesn't like but it's my commitment to continue to work on a good capital budget process to incorporate things the governor needs and things the districts need," Harris said.

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