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Parnell readies for vetoes in budget

Posted: Tuesday, April 20, 2010

JUNEAU - Gov. Sean Parnell says legislators expect him to cut the roughly $3.1 billion capital budget they have sent him - and that he's willing to comply.

Michael Penn / Juneau Empire
Michael Penn / Juneau Empire

Speaking to reporters Monday, hours after the Legislature adjourned, he said he'd let lawmakers make their case for high-priority projects before deciding vetoes.

"I'm going to have to ratchet things back so we exercise some restraint and so we save for the next 10 years of time," he said.

Lawmakers, particularly in the House, have shared Parnell's concerns. Rep. Mike Hawker, a finance committee co-chair, said the package "verges on a level of irresponsible spending." Rep. Mike Doogan, speaking on the House floor before the package's passage late Sunday, said the state can't afford to keep doling out like this. With the operating budget legislators also approved, the state is poised to spend an estimated $11.5 billion.

Top senators, who shipped a $2.8 billion capital plan to the House, defended it as responsible, if not tight, and what the state needs to jolt the economy and put more people to work. They said lawmakers held back on capital spending last year - and needs to start making up for that.

"Saving spree" became a mantra among leaders of the Senate Finance Committee, who said initial consideration went to forward-funding education at $1.1 billion and repaying a roughly $400 million debt to a state reserve fund. They also noted the state has billions more in savings and reserve.

"We've been good stewards," Senate Majority Leader Johnny Ellis, D-Anchorage, said shortly after adjournment.

Credit oil for the flush coffers and for recent revenue forecasts that project the state will have $100 million more than anticipated for the upcoming spending year because of better-than-expected prices. But North Slope oil production continues to decline, and the state - optimistically - is a decade from realizing a major natural gas pipeline that could help offset some revenue loss.

Senate President Gary Stevens said Parnell gave lawmakers $100 million to work with. That number "isn't practical, doesn't work, and we're going to serve the people of Alaska," said Sen. Charlie Huggins, R-Wasilla. For the first time in his memory, he said, the state proposes to build new rail - two projects totaling more than $100 million - as part of the capital plan.

The package is better described as omnibus than capital; it includes deferred maintenance spending and nearly $76 million for a crime lab Parnell considered a priority but some lawmakers criticized as too opulent; $140 million for reimbursement costs for work being done on a major natural gas pipeline proposal; infrastructure spending on things like rail, road, port and harbor work; funds for energy and wind generation projects, and a host of local grants, for items ranging from ballfields and parks to cameras and projectors for schools and $50,000 for Arctic Winter Games bid planning and submission for Juneau.

The total also includes authorization to use nearly $400 million in bond proceeds for university, research and school construction projects that voters will be asked to decide.

Rep. Bill Stoltze, Hawker's co-chair, lamented the lack of "legacy-" type projects in the bill the House inherited from the Senate, anchors capable of spurring greater regional and statewide economic development.

Parnell said he hadn't mapped out a veto strategy yet but did have an unspecified dollar figure in mind. He said that going into the session, he'd set spending limits for himself and for lawmakers, but the Legislature went "far beyond."



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