Governor Parnell Signs Budget
May 15, 2012
“Our priorities are jobs and economic opportunities for Alaskans,” Governor Parnell said. “Infrastructure development and energy projects will unlock more Alaskan success stories.”
The capital budget will fund many important transportation and infrastructure projects across the state.
More than $1.6 billion was appropriated for highways, aviation, the Alaska Marine Highway, harbors, village safe water, and municipal water and sewer projects. The Roads to Resources initiative was also funded allowing work to continue on a road to Tanana, the Ambler District Road, a road to Umiat, and improvements on the Klondike Industrial Use Highway to Skagway.
Another $50 million was set aside in the Vessel Replacement Fund as a down payment on the second new ferry for the Alaska Marine Highway System.
“Maintaining spending discipline, focusing on our constitutional priorities, investing in infrastructure to build economic opportunity, and saving for the future are vital components of the budget approved for the upcoming fiscal year,” Governor Parnell said. “I appreciate the detailed legislative work on the budget and legislators’ willingness to join me in limiting spending.”
The operating and capital budgets statewide now total $12.1 billion, including $7.9 billion in state general funds. Total state operating budget growth has been limited to 3.3 percent. The budget includes full funding for K-12 education, Medicaid, retirement system unfunded liability, debt service, and employee contracts. The capital budget totals $2.9 billion, including $1.9 billion in state general funds.
Highlights of capital projects in Southeast Alaska include:
Ketchikan - airport taxiways and apron rehabilitation $10 million
Public Safety and Health
Ketchikan - Ketchikan Medical Center improvement project $3 million
Alaska State Library, Archives and Museum facility $49 million
Two billion dollars of surplus funds were moved to savings with the potential of up to $3.4 billion going into the Statutory Budget Reserve based on projected FY 2012 and FY 2013 balances.
“Maintaining strong cash reserves and budget discipline are critical components of our long-range fiscal plan,” Governor Parnell said. “Given the steady decline in oil production and the volatile nature of oil prices, we will need cash on hand to provide state services in the future.”
Statewide direct K-12 education funding increased $50 million in the signed budgets. The total state funded K-12 education and pupil transportation budget for FY 2013 is $1.2 billion. New legislation increased pupil transportation funding and resources to expand vocational education funding from grades 7 through 12. In addition, the state directly funds more than $329 million for school district retirement system unfunded liability for the Public Employees’ and Teachers’ Retirement Systems. The capital budget also includes over $431 million for school and university projects statewide.
Nearly $12 million in additional resources to combat domestic violence and sexual assault are included in the operating budget for prevention and intervention, support for survivors, and law enforcement. This funding includes 15 new Village Public Safety Officers the governor requested and additional Trooper support. More than $115 million is included in the capital budget for first responders, public safety, fire and rescue, emergency response and disaster preparedness projects across the state.
The capital budget contains over $247 million for statewide energy projects including: $31.5 million for weatherization programs to help Alaskans make their homes more energy efficient; $25.9 million for the Renewable Energy Fund targeting projects in areas with the highest energy costs; and $20 million for home energy rebates. The operating budget contains $38.2 million to fully fund the Power Cost Equalization Program, and an estimated $48 million for the Alaska Low-Income Energy Assistance Program. In addition, $125 million was appropriated for the new Sustainable Energy Fund to help finance energy infrastructure projects that will reduce the cost of energy to Alaskans.
Governor Parnell exercised his constitutional line-item veto authority to reduce spending. The governor vetoed a total of $66.6 million, largely from operating items.
The largest operating item vetoed was $50 million for the Judicial Retirement System account. The amount would’ve made the system whole. Alaska House Finance Committee Co-chair Bill Thomas, R-Haines, said that the legislature has worked in the past to fill expected shortfalls in the system and that the line item veto used in this case wasn’t surprising. “It is something we can live with,” Thomas said. “We knew there was some sensitivity there in ‘re-fixing’ their system with another direct cash infusion. We’ll bring everyone back to the table again and see if there is a better way to address the issue.”
The remaining line item vetoes came from the capital investment bill. The items vetoed came from early learning and substance abuse programs, but only two items were completely vetoed. Alaska House Finance Committee Co-chair Bill Stoltze, R-Chugiak, said that’s the prerogative of the governor, as state leaders face revenue uncertainty moving forward. “The governor used his prerogative as chief executive to trim judiciously,” Stoltze said. “This is a responsible budget but not a sustainable budget. It is essential for Alaska that we increase production flowing through the Trans Alaska Pipeline with measures like reasonable and responsible oil tax reform.”
Senator Gary Stevens (R) praised Governor Parnell for his actions as he signed the Fiscal Year 2013 Capital and Operating Budgets yesterday in Anchorage.
“We are very pleased with Governor Parnell’s actions on the Operating and Capital Budgets,” said Senate President Gary Stevens. “The Legislature agreed not to overspend, and in return, the Governor said he would not veto projects. Both sides kept their side of the deal, making it a great day for all Alaskans.”
The Alaska Democratic Caucus posted their comments regarding the budget on Facebook. "In all, the budgets for this year are good for Alaska, but it is short-sighted of the governor to cut preschool and substance abuse treatment money. Unfortunately, the statistics show we need to do better at both preparing our kids and protecting our citizens. Preschool is proven to get results later in life, and reducing substance abuse in Alaska will reduce domestic violence and help in many other ways. We will continue to lead on these issues despite the governor's reluctance."
Edited by Mary Kauffman, SitNews
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