Latest version of capital building grows to $2.2B

Posted: Sunday, April 11, 2010

JUNEAU - Gov. Sean Parnell's claim that a flush capital budget could "overheat" Alaska's economy is baseless, a co-chairman of the Senate Finance Committee said Friday as the spending bill that lawmakers are crafting grew to $2.2 billion.

Sen. Bert Stedman said if anything, the state's at greater risk of seeing its economy slow down than speed up.

"We cannot get jobs on the street and move the economy of this state foward by letting the operating budget grow and not putting any capital money in roads and buildings and dealing with deferred maintenance," he said.

It's the operating budget, not the capital budget, that's troublesome since once money is added to an operating budget, it's hard to remove it, Stedman said. The operating budget that lawmakers are mulling separately tops $8 billion.

On Thursday, the day after the committee released its first draft of a $2.2 billion capital bill, Parnell urged lawmakers to use restraint and to change course from what he now sees as their path to a "bloated," perhaps $3 billion, capital spending plan.

Stedman shrugged that off, saying lawmakers are on a "spending spree," planning to forward-fund K-12 education, at $1.1 billion, and repay a $400 million debt to a state reserve fund.

He also said that given legislators pulled out $488 million in capital spending last year amid budget concerns, the $590 million in additions that his committee is now weighing amounts to little more than $100 million over the last governor's capital budget.

"I guess it all depends on how you want to look at the numbers," he said.

He expected the bill to be under $3 billion, once an expected bonding package, which could include big-ticket university or other projects that voters would be asked to decide, is figured in. But he also noted that the House still gets its say. And Parnell has veto powers.

The latest draft proposal includes nearly $1.2 billion in general fund spending, and rolls deferred maintenance, supplemental and other infrastructure projects into a single bill.

Among a long list of proposed new projects - added since the first draft was released Wednesday - includes a $13.4 million grant for planning and building a blood bank in Anchorage; $9.3 million for a tribal health consortium long-term care facility; a boost to $4 million for a Fairbanks pipeline training center.

Other items in the bill include $140 million for reimbursement costs for work being done on a major natural gas pipeline proposal; $2 million to plan and design a new state office building in Juneau; port and harbor projects and a host of local grants, ranging from funds for community center work to search and rescue training to ballfields, parks, even cameras and projectors for schools and a rock climbing wall at one Anchorage elementary.

The committee planned to meet Saturday to consider further changes. The Legislature is currently set to adjourn April 18.

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