Parnell asks for restraint in capital budget requests

February 09, 2010

Gov. Parnell says the state needs to hold back spending even in times of excess so there's enough to cover tough times. (Daniel Hernandez/KTUU-DT)

by Ted Land
Tuesday, February 9, 2010

JUNEAU, Alaska -- Gov. Sean Parnell has made it clear-- the state needs to save money.

But some lawmakers are concerned about what this means for their communities.

They were hoping to bring home millions and say that might not happen this year.

The issue is the capital budget, which helps pay for roads, schools, power plants; any kind of improvement on the state's infrastructure.

Parnell has been meeting with House and Senate leaders, starting the conversation about how the state's budget will take shape.

"What I've said is in my capital budget I'm building room in for you, Senate, you, House, to put the projects in that you think are important and to discuss the ones that I've put in," Parnell said Tuesday.

The governor proposes spending about $300 million for state agencies—that's money for the university and state buildings which need things like maintenance and furniture.

Parnell has indicated he does not want the capital budget to exceed $400 million dollars.

Senate leaders are just doing the math and are under the impression they can only spend about $100 million, about a quarter of what they're hoping to bring back to their communities for local projects like bridges and roads.

"I think we'd like to see a little more room for projects that we think need to be done," said Sen. Gary Stevens, R-Kodiak, who is also the president of the Senate.

Parnell says that figure of $100 million is a mischaracterization. He says there is room to negotiate and the legislature could end up spending more within reason.

"This year what I've said is we are going to exercise restraint because in times of plenty we save for those lean times," Parnell said.

"As a fiscal conservative, as someone who's running for office, I think he wants to keep a cap on how much we do spend. That's only understandable," Stevens said.

Last year the legislature made a conscious effort not to include local capital projects in order to limit spending. They wanted to be cautious and were hoping for a little more freedom to spend this year.

Also Tuesday, Parnell formally transmitted his legislation to change Alaska's oil production tax.

His bill would increase tax credits to encourage companies to explore and produce on the North Slope.

Contact Ted Land at tland@ktuu.com

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