Palin rolls out 4% budget increase

Governor says capital, operating plans hold spending line despite big surplus

Posted: Tuesday, December 11, 2007

Gov. Sarah Palin on Monday released her budget proposal for next year, proposing a 4 percent general fund spending increase that she said was tapering off the big spending increases of recent years.

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At a press conference in Anchorage, Palin said her budget "departs from 14 percent annual increases that we've been seeing."

Palin's budget totals $8.3 billion, of which $4.4 billion is part of the general fund.

Operating expenses for state agencies amount to $1.8 billion, just less than the $1.9 billion in surplus funds she said would be saved and invested for the future.

What increases there were, she said, were often unavoidable, driven by rising fuel and health care costs. Amounts for agency operations rose just 1 percent over the current year, she said.

Web links

• Palin's budget priorities:

• Palin's budget proposal:


Budget highlights

Plan for fiscal year 2009

• $100 million for school construction and maintenance.

• $10.1 million for work force training, other University of Alaska programs.

• $20.3 million to increase assistance to low-income seniors.

• $75 million for community revenue sharing.

• $1 billion for K-12 education.

• $406 million to offset rising retirement costs for schools, government.

• $71 million in general fund, plus $237 million in federal money for highways.

• $379 million deposit to the Constitutional Budget Reserve.

• $4.5 million to fill 20 vacant trooper positions, hire 11 additional troopers and court security officers.

Source: Palin administration

Palin said her department managers required tough justification for new and existing expenses, starting with $1.5 billion in proposed spending increases from government agencies.

"They worked very hard to slow the rate of government growth," she said.

Palin also said her budget proposal for the next legislative session saved the bigger portion of the state's oil-fueled budget surplus, but also proposed borrowing money to do additional spending.

She said she'd like to issue general obligation bonds to fund transportation improvements, as well as build a new $100 million crime laboratory in Anchorage.

Palin said her $140 million transportation package would result in improvements from Southeast Alaska to the Dalton Highway, over which supplies are hauled to the North Slope.

A separate measure would provide for the crime lab, which would replace the existing one where 40 employees are crammed into a space designed for 14, she said.

"It's got a big price tag," she acknowledged, but said the building was needed.

Bonding would require a public vote, she said, so the state will find out whether the public supports her plans.

"We're going to let Alaskans vote yea or nay," Palin said.

Senate Finance Committee Co-chairman Bert Stedman, R-Sitka, questioned why the state would set aside $1 billion in a transportation endowment fund, while at the same time issue bonds to borrow money for highway improvements.

"We need to have a policy discussion on that," he said.

Rep. Andrea Doll, D-Juneau, questioned the number of new funds Palin proposed.

Doll said it looked to her like Palin's new funds, for education, transportation, energy and other issues, were intended to get around a constitutional prohibition that prevents one legislature from forcing future legislatures to spend money on certain projects or programs.

"It kind of flies in the face of what our constitution intended, that all needs should be equally debated," she said.

Palin also proposed a 50 percent increase in community revenue sharing for cities and boroughs, sending a proportion of the state's surplus directly to local governments, instead of having the state allocate projects for them.

"This will allow our communities to prioritize," Palin said.

She said she'd encourage them to spend the money on property tax and energy cost relief.

Stedman said he doubted there was support in the Legislature for that, and the cuts to regional projects might be bigger than the amount sent directly to communities.

"I don't think the Legislature is going to agree with that, but there is not an objection to revenue sharing itself," he said.

Stedman said he was concerned that Palin's budget proposal didn't included $25 million needed for new engines in the ferry Columbia.

Doll said she too was concerned about the lack of priority given to the ferry system.

"In Southeast we need reliable ferry service, and the Columbia is in desperate need for these engines," she said.

Capt. John Falvey, manager of the Alaska Marine Highway System, did not return calls Monday.

Palin's proposed budget was released several days ahead of the Dec. 15 date required by law. She said that was intended to give the Legislature extra time to deal with the budget prior to the first-ever 90-day session next year.

• Contact Pat Forgey at 523-2250 or

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