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Senate passes skinny $2B capital budget

Posted: April 6, 2013 - 9:59pm

JUNEAU — The Alaska Senate passed a $2 billion capital spending package Saturday — much smaller than Alaskans have seen in recent years but one that a leading senator suggested they’ll have to start getting used to.

Saturday’s 17-3 vote followed several failed attempts by minority Democrats to amend the bill, including a bid to add additional funding for things like two engineering buildings within the University of Alaska system. Sen. Berta Gardner, D-Anchorage, originally voted against the bill but changed her vote on reconsideration.

Sen. Kevin Meyer, who oversaw the crafting of the package as co-chair of the Senate Finance Committee, said the days of very robust capital budgets are a thing of the past, at least for the near future, until the state starts to see more oil production.

Alaska relies heavily on oil revenues to run, but higher prices in recent years have helped to mask the impact of declining production on the state budget.

Meyer, R-Anchorage, said the roughly $109 million needed to finish the engineering buildings at the University of Alaska Anchorage and University of Alaska Fairbanks was too big an ask during a session in which lawmakers and the governor have been trying to rein in spending and plan for how the state might absorb the near-term hit in revenue from a proposed oil tax cut. The tax overhaul is aimed at helping boost production but it could cost the state billions of dollars in the coming years.

Supporters of an oil tax cut say the state would be in a similar predicament — looking to cut spending and dipping into reserves — even if a tax change wasn’t on the table.

Meyer said he was appalled that work on the buildings would begin without the full funding in hand, which he said isn’t the Legislature’s problem or mistake. Meyer said he would be willing to have a conversation about whether to dig into savings for the projects or, in the future, consider an education bonding package.

The spending plan includes a $1.9 billion capital budget for next year, in addition to some items for the current year, including about $95 million to further advance work on the Susitna-Watana hydro project. Meyer said the goals for the capital budget were finish projects already under way, maintain existing assets and include projects that were deemed critical or of greater importance to individual senators.

But Sen. Bill Wielechowski, D-Anchorage, said he’s been a big supporter of capital budgets in the past but he said he was confused by some of the priorities in this bill. He said there also was a lack of balance, which he said he hopes can be restored on the House side.

That’s where the bill is now headed, with just days left in the legislative session.

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