Capital budget continues to grow

Posted: Thursday, April 10, 2008

It could be one for the record books.

The latest version of the capital budget has something for everyone, whether a columbarium for a Kasilof cemetery, a wood chipper in Tok, restoration of a totem pole in Saxman or a new roof over the Kotzebue armory.

"I do have an amendment for a kitchen sink," quipped House Finance Committee co-Chairman Mike Chenault, R-Nikiski, as members spooled in the hallway and aides rushed by with amendments before a final meeting on the budget on Wednesday.

Gov. Sarah Palin's statewide infrastructure projects also are back in - $447 million worth. So are $35 million in district-level projects she vetoed last year but pledged not to if they reappeared again in this budget.

All told, capital spending in the House bill totals $2.86 billion, including $1.1 billion in general funds and $887 million in other state funds. The rest are federal dollars.

"A lot of people are scouring this bill," said Karen Rehfeld, Palin's budget director. "There are a lot of moving parts, and we are just going to have to spend some time trying to figure out what we have here."

As Rehfeld and her team poured over the 208-page document, others were working on their own analysis.

Fairbanks Sen. Gary Wilken, a member of the Republican Minority, was in his office hunched over past years' spending charts.

He pointed out the proposed 2009 capital budget surpasses that of fiscal year 2007. Until now, that was the record year for capital spending. In fact, then-Gov. Frank Murkowski signed the budget bill wearing a Santa Claus hat.

But it's not the amount of spending this year that's bothering Wilken. He's waiting for a spreadsheet from the legislative finance division that he suspects will illustrate that some districts fared better than others.

"I want to build Alaska and if we have some dollars, we should. So I'm not so concerned with the elevated amount as I am with the unfair method of distribution," Wilken said.

House finance leaders say they've worked to adjust the imbalances from the Senate and describe the budget as fair and geographically balanced.

Asked if it looked to be a record spending year, House Finance co-Chairman Kevin Meyer, R-Anchorage, sidestepped the question.

"Well, it's certainly a record savings year," Meyer said.

Legislators have socked lots of money away. State coffers are bulging with surplus dollars thanks to high oil prices and a recent change to the oil production tax that kicks up a notch when the prices are high.

The budget directs $400 million to the state savings account, the Constitutional Budget Reserve Fund. Another $1 billion in the operating budget also is destined for the fund. Lawmakers earlier tucked $3.6 billion from the 2008 surplus revenues in a separate appropriation bill.

The budget also would allow the state to spend $220 million on mostly road and bridge improvement projects if voters agree to the sale of general obligation bonds to cover them. Lawmakers still have not agreed whether to move forward with a bond package, however. Some say the projects should be funded with cash.

The House is planning to have the bill on the floor today.

Meanwhile, a conference committee on the operating budget is expected to wrap up its work Thursday. Members are reconciling the differences between the House and Senate versions of the state's proposed $9.5 billion operating budget.

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