Gov. Sarah Palin signed a hotly disputed state supplemental budget bill Thursday, using her line-item veto pen to strike more than 80 percent of $70 million in capital projects that were inserted by lawmakers.
But it's not all bad news for them. She's recommending that most of those vetoed projects be funded in the 2009 capital budget instead, using this year's surplus revenues from high oil prices. That's a promise legislators are banking on.
"Overall I'm pretty pleased with it," said House Finance Committee Co-Chairman Kevin Meyer, R-Anchorage. "It's my understanding she approved the projects. She just wants them vetted in a different vehicle."
Juneau did well in Palin's supplemental budget vetoes, as Juneau Rep. Beth Kerttula, House Democratic leader, said the governor appeared to be trying to minimize conflict with the Legislature.
"I think it's a good list," she said. "It's my hope everybody can come out of their corners and start working together on this."
Two of Juneau's four projects were vetoed, but the city's top priority, $1.3 million to bring power to an FAA monitoring station on Douglas Island survived, as did a final $10,000 payment on a state marine parks work boat.
Vetoed was $46,850 for Gastineau Human Services and $53,000 for dental equipment for Lemon Creek Correctional Center.
Palin promised support for those vetoed projects in a more appropriate capital budget.
The supplemental budget bill became the battleground in recent weeks between lawmakers asserting their power of appropriation and the governor asserting her right to constrain and shape government spending.
Although the $4.3 billion budget contains significant items, such as $3.6 billion in savings, $18 million for senior benefits and $125 million in tax credits for oil and gas producers, it was the capital projects that captured the most attention.
Palin left 52 projects worth $12.4 million in the bill, mostly for rural areas where she said timing was critical for barging in equipment and supplies for this year's building season.
She is recommending that 155 projects totaling $35.4 million be added to the capital budget.
The remaining 16 projects totaling $22.3 million were vetoed outright.
The House Finance Committee begins work this week on the Senate's version of the capital budget, which Palin roundly criticized, saying it lacked critical projects.
Now Palin must work with Meyer to see her own items, such as Dalton Highway repairs and deferred maintenance on state-owned facilities, reinserted.
"What we found out with the supplemental is that she is listening to us," Meyer said. "I'm anticipating that we are going to be working closer with the governor as we put together the capital budget on the House side."
Palin's decision ends two weeks of meetings with individual lawmakers over the construction projects and equipment that were among the scores of community and school district priorities that she vetoed last summer, to the surprise and anger of lawmakers.
Empire reporter Pat Forgey contributed to this story.