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Parnell wants hold-the-line operating budget

Posted: Wednesday, September 15, 2010

JUNEAU - Gov. Sean Parnell anticipates cuts to parts of Alaska's operating budget for next year while holding the line on the overall spending plan, he said Tuesday in an interview.

Parnell told The Associated Press that to accomplish that, he'll look to make cuts in some areas while also providing increases, as he sees fit, for what he calls "constitutional priorities" - resource development, education, transportation and public safety.

For example, Parnell wants to see a continuation of hiring new village public safety officers to bolster the law enforcement presence in parts of rural Alaska.

He did not offer more specifics.

"Am I ready to make a big budget announcement? No," he said. "That will come Dec. 15."

The current budget totals $8.2 billion, up from $8.19 billion the prior year.

Parnell has blamed much of the run-up in costs to entitlement programs, such as Medicaid, in which he said the law drives the amount of money required. He said the program is growing at an unsustainable rate and he is seeking recommendations from legislators and administration officials on "how, in the long run, to change the trajectory of that."

Parnell said he hopes there will be recommendations that can be implemented, either by passing legislation or by administrative means, in the months ahead.

Whether that can be done, though, is unclear: the first meeting of the Medicaid task force is Sept. 29, and Health and Social Services Commissioner Bill Hogan plans to hold several more meetings through May. A final report and recommendations are due sometime in 2011, according to a department spokeswoman.

Meanwhile, Parnell, who is seeking election to the office he inherited when Sarah Palin resigned last year, plans to propose initiatives to encourage more investment in oil production.

He had mixed results with tax breaks and other proposals made during the last legislative session, and his campaign last week said he was preparing new initiatives for the session. Parnell said Tuesday, though, that he is still at a point now of listening to the industry, public and others.

He declined to say whether he thought the current oil tax structure was broken.

"My view is that we can always work to improve investment opportunities and job opportunities for Alaskans. I'm open to ideas that will do that," Parnell said.



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