SitNews - Stories in the News - Ketchikan, Alaska


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 project."
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 and Hollis.

"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 youth activities.
  • 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 budget.

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 pdf)

OMB link to budget information:


Sources of News:

Office of the Governor
Office of Sen. Bert Stedman
Office of Senate President Lyda Green

E-mail your news & photos to

Publish A Letter on SitNews
        Read Letters/Opinions

Contact the Editor

SitNews ©2007
Stories In The News
Ketchikan, Alaska