Governor Palin Signs Budget
Bills into Law
Vetoes Nearly Quarter of a
Billion Dollars in State Capital Spending
June 29, 2007
Alaska Governor Sarah Palin today signed three budget bills into
law: House Bill 95, House Bill 96, and Senate Bill 53.
The Governor vetoed nearly
a quarter of a billion dollars of projects contained within Senate
Bill 53. Establishing a budget process, the Governor focused
her decisions on the Constitutionally-mandated services of education,
public safety and health, and infrastructure.
"Vetoes included within
the decision-making process are not a reflection on the project
itself, but upon the state's responsibility to pay for the proposed
Gov. Sarah Palin
"This was a very deliberative process, meant to provide
consistency and a level of fairness in a process that can be
anything but fair," said Governor Palin. "Vetoes included
within the decision-making process are not a reflection on the
project itself, but upon the state's responsibility to pay for
the proposed project. We recognize that we have got to change
the system. We have already begun working with legislators to
change the process and this is a good start."
"I know we share the goals of creating a strong economy
with good jobs, an education system that is world class in preparing
our children for those jobs, safer communities and good solid
infrastructure," said Governor Sarah Palin. "The budgets
before us will set us on a course to make that vision a reality
by prioritizing our spending, making substantial investments
in core services and saving for our future."
However, Senator Bert Stedman
(R-Sitka) expressed surprise over with the size and extent of
Governor Palin's vetoes within the FY08 capital budget. Stedman
represents Senate District A which includes the Southeast communities
of Ketchikan, Sitka, Wrangell, Petersburg, Pelican, Elfin Cove,
Port Alexander, Saxman, Meyers Chuck, Thorne Bay, Coffman Cove
"I'm disappointed that
the Governor chose to cut so many priority community projects
across the state" said Stedman. "The Legislature's
capital budget was reasonable, thoughtful and well within the
state's financial means to support".
In a news release Stedman said at $1.7 billion, the FY08 capital
budget was $1.0 billion (37%) less in total funds and $159 million
(23%) less in state general funds than the FY07 budget. The Legislature
also put $1.1 billion into additional savings vehicles during
this session's budgetary process.
Stedman, who is the Senate Finance Co-Chair responsible for drafting
the capital budget, said "The Governor gave no indication
that she didn't intend to honor the Legislature's prerogative
to award small discretionary capital grants. This has always
been an integral part of the appropriation process and a principal
means by which many worthwhile community projects get funded."
Stedman indicated that this year's budget process was as methodical
and deliberate as it has ever been and was surprised that it
is being characterized otherwise. He said, "The public was
involved at every step of the way. Many of the projects the Governor
vetoed today were at the top of the priority lists my office
received directly from local City Councils and Borough Assemblies".
"I'm personally disappointed that the Governor cut $5.0
million from the statewide Municipal Harbor Facilities Grant
program that we've worked 3 years to develop. The program matches
state dollars one-for-one and is just the sort of cost sharing
program the Governor says she supports" concluded Stedman.
Senate President Lyda Green
(R -Wasilla) expressed a mix of concern and disappointment over
the list of line item vetoes to the FY 2008 capital budget announced
today by Governor Sarah Palin.
"Governor Palin and I
agree that spending needs to be prioritized because the state
may be facing deficit spending sooner rather than later,"
said Green. "However, many of the items that were vetoed
adversely impact core state services like education, health,
public safety and transportation, so I am a little concerned
about the long term impact these cuts could have."
Some of the vetoes listed by
Green which she says could adversely impact the state:
- Public Schools - Grants to
local schools were cut that would have been used for basic maintenance
needs, educational materials and technology improvements. The
capital budget directs funding to schools for specific needs
so it cannot be diluted by school district management costs.
This is one way lawmakers can make sure that specific needs are
met through a direct appropriation. Although funding for after-school
youth programs was reduced by half, the bipartisan working group
appreciates that some funding was kept to pay for after-school
- Road improvements - Millions
of dollars were eliminated for badly needed surface transportation
projects from the Palmer-Wasilla Highway to local street upgrades.
The Palmer-Wasilla Highway is a major roadway for the state's
fastest growing region and saw its funding reduced by five million
dollars. The highway has one of the highest accident rates of
any road in Alaska and fully funding that project was fiscally
responsible due to the rising cost of highway construction.
- Port of Anchorage - The Port
of Anchorage provides a valuable public service to about 80 percent
of the state's population because it handles around 90 percent
of the state's consumer goods like food and clothing. The $10
million was for necessary expansion and improvements to the port.
- Fire Island Wind Farm Transmission
Lines Energy costs are soaring and clean, renewable energy
can play a big role in keeping down those costs. The capital
budget passed by the legislature appropriated $20 million to
construct electrical transmission lines from the proposed Fire
Island wind farm to Chugach Electric and Municipal Light &
Power's electrical infrastructure. Delaying the wind farm could
mean higher energy bills for thousands of Alaskan families.
Green noted that despite differences
of opinion on the capital budget, the Senate Bipartisan Working
Group remains committed to working with the Palin administration
on responsible budgets and a long term fiscal plan for the state.
Members of the Senate Republican
Caucus however reacted favorably today to Gov. Sarah Palin's
reduction of Senate Bill 53, the state capital budget, by more
than $230 million.
"The budget grew despite cautions from the administration,
and consequently the governor had to exercise her power to bring
it more in line with revenues," said Senate Minority Leader
Gene Therriault, R-North Pole. "While our individual members
are still going through the vetoes, we are supportive of the
Governor's efforts to control spending."
"Although we are still digesting the details to make sure
the criteria were applied consistently and equitably throughout
all regions, we appreciate the administration's deliberative
process to fairly evaluate projects based on what is affordable
and a legitimate state function," Sen. Therriault said.
"The most consistent comment we have heard from voters is
that there is too much state spending. The governor was elected
with a huge approval rating, and I think this is what the people
have asked her to do. The budget is unsustainable. We'll be in
a deficit in a couple of years and it's better to make cuts now,"
said Sen. Con Bunde, R-Anchorage.
Because of concerns regarding the level of overall state funding,
all five members of the Senate Republican Caucus voted against
Senate Bill 53 when it was on the senate floor. On May 22, the
caucus sent a letter to Gov. Palin encouraging her to identify
areas where spending could be reduced and judiciously exercise
her line-item veto authority.
House Bill 95, sponsored by
the Governor, establishes the fiscal year 2008 state operating
House Bill 96, sponsored by the Governor, establishes the fiscal
year 2008 state mental health budget and makes appropriations
for the operating and capital expenses of the state's integrated
comprehensive mental health program.
Senate Bill 53, sponsored by the Governor, makes and amends capital
and supplemental appropriations and ratifies certain expenditures.
On the Web:
Capital Budget Cuts (18 pages
OMB link to budget information:
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