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Parnell wants reduced spending in next budget

Posted: December 3, 2013 - 10:25pm

JUNEAU — Gov. Sean Parnell said Tuesday he plans to address Alaska’s nearly $12 billion unfunded pension liability as part of an overall effort to rein in spending amid lower expected revenues.

In an interview with The Associated Press, Parnell said he would like to see state spending well below current levels for the upcoming fiscal year. He did not provide specific numbers but said he would work with legislators on a spending target.

He said the budget he plans to propose next week will leave room for them to add. “But, again, there needs to be a measure of restraint in doing so,” he said.

Parnell said revenues are expected to be lower because of lower oil prices and declining production — not because of the new oil tax.

Alaska relies heavily on oil revenue to fund state government, but production has been trending down for years. Higher prices in recent years helped mask the impact of the decline.

The Legislature earlier this year passed an oil tax cut championed by Parnell that is aimed at spurring production. Critics called the tax cut a giveaway to the industry that could put the state treasury at risk. But the governor said the revenue coming in under the new tax will be comparable to that of the old system because of the lower oil prices. If prices continue to drop, he said his message to Alaskans will be that they are better protected at lower prices than under the prior system.

The new oil tax is the subject of a referendum that voters will decide next year. A new revenue forecast is scheduled to be released Wednesday.

“I think we have a responsibility to lower spending in this environment, and my budget will reflect that I take that responsibility seriously,” the governor said.

Parnell plans to address what he calls one of the biggest drivers of the budget: the unfunded pension liability. The state is on a payment schedule that is expected to grow from the current level of more than $600 million to more than $1 billion before declining.

The governor in the past has supported staying on the payment schedule, but said he now believes that course is “unsustainable and threatens our operating budget.” He said his thinking on the issue was influenced, in part, by concerns raised about it by rating agencies.

The Alaska Retirement Management Board earlier this year proposed that the Legislature provide an infusion of $2 billion toward the public employees and teachers’ retirement systems over four years, which it said would save money in the long run. Parnell has not publicly discussed his plans but said the state needs to get a better handle on issues like this and Medicaid as it works to address overall spending.

Senate Minority Leader Johnny Ellis, D-Anchorage, said the pension issue has “demanded leadership for some time” and said he’s happy to see “some level of willingness” to address it now. Ellis in 2012 proposed legislation — that ultimately went nowhere — that would have moved $2 billion from savings into a special fund intended to help address the state’s pension debt.

“I guess I’m just saying, better late than never and let’s work together to address this issue,” he said.

The state started the fiscal year with about $16 billion in savings between the constitutional and statutory budget reserve funds. Savings are expected to help the state balance the budget in coming years as state officials watch to see whether the oil tax — if it stands — has the desired impact on production that they hope.

Parnell said he also will propose a capital budget focused on maintaining state infrastructure, including addressing deferred maintenance, and finishing projects that already have been started.

He declined to say whether he asked for specific departmental cuts but said he and his budget team “worked hard to push spending down.” He said their goal was having a more sustainable budget in the long run while continuing to meet constitutional obligations and administration priorities, such as funding for village public safety officers and state troopers.

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jake
63
Points
jake 12/04/13 - 02:26 pm
0
1
budget

Of course the budget needs to be cut, get those lazy poor people off the state "tit" and no more free school lunches, etc and we'll be fine. Frank started, cut public health, restaurant inspections, of course two local restaurants got the health Dept called on them, one for storing plates and silverware in the employee bathroom and the other when the sewer backed up in the kitchen sink and people got sick. But we saved money and gave it to the oil company's

KenaiKardinal88
474
Points
KenaiKardinal88 12/07/13 - 08:01 am
0
3
State Employees Bankrupting Alaska

The liberal Dems lined the pockets of state employees for years when they were in charge. Now the unfunded liabilities will bankrupt Alaska.

Even Parnell's cuts will not be enough. Unlimited wants from rural Alaska and the state unions are destroying Alaska.

RaySouthwell
1054
Points
RaySouthwell 12/07/13 - 09:41 am
2
0
Compounded interest

I just wonder what the compounded interest is that Alaska paid out to Wall Street banks? The bankruptcies of Detroit and Jefferson County Alabama revolved around the interest paid out to Wall Street Banks. Change the system and create a public Bank of Alaska. Consider interest as income. That's what North Dakota does with their public Bank of North Dakota.

Suss
3917
Points
Suss 12/07/13 - 11:34 am
4
0
$arah's ACES' tax was our savings account

Parnell gets rid of those pesky oil taxes so he can dip into our saving accounts. Parnell blames low oil prices for the State's tax shortfall when it is his own doing by cutting oil taxes. There would be a trial for treason in certain third world countries for this type of conduct. In Alaska we just call this being in the Oil Business. When Big Bill Allen was running Juneau he could have only dreamed of the giveaways Parnell and crew have accomplished. KK88 keep blaming anyone you want but you better start looking at who is doing the most harm right here, right now. Vote these Oil whores out of office and reclaim our State.

RaySouthwell
1054
Points
RaySouthwell 12/07/13 - 12:54 pm
2
0
Politicians fear

Politicians fear big oil may take their money and leave Alaska. Then what? 90% of our State's income is from oil/gas. Big oil dictate the terms of our surrender.

Politicians will never change. However if we the people created our own public Bank of Alaska, we could create our own money and tell big oil the terms of their surrender.

But, much easier to complain about politicians. They fear losing their job by making big oil unhappy. Can you blame them? Let's change the system and maybe the politicians would again fear the people rather than big oil.

Norseman
3593
Points
Norseman 12/07/13 - 02:06 pm
3
0
The problem is apathy. It is

The problem is apathy. It is going to take a charismatic grass roots leader to get the Alaskan people fired up and ready to go.

Anyone with an IQ over 20 knows exactly who runs this state. We are owned, not an owner state. I really like the term suss used....oil whores. Bout sums it up.

Ray, put together something and I think you can gain plenty of traction with your idea of an Alaskan owned bank.
I watched the utube vid on ND. Cripes, if north dakota farmers can do it, us Alaskans should be able too.
First off we need to get rid of the political elite who are owned by big oil. They need replacing.

RaySouthwell
1054
Points
RaySouthwell 12/08/13 - 08:40 am
2
0
Norseman

We keep hoping on a change from new politicians. No change will occur until we change the system on who creates and has the money. Alaskans are split on what to do. We argue problems but ignore the root cause. Monopolies like it that way. Let's take our billions of dollars and establish a public Bank of Alaska then create tens of billion of dollars and watch the politicians follow the people to productive success.

Suss
3917
Points
Suss 12/08/13 - 09:32 pm
2
0
Norseman
3593
Points
Norseman 12/09/13 - 08:00 am
3
0
Not hard for anyone to say

Not hard for anyone to say this state is without leadership. That is a fact. I was impressed with the article however, and depending on who is on his "All Alaskan" team, I may switch and vote for him.
If debbie brown is one of his "team" then all votes are off the table.

RaySouthwell
1054
Points
RaySouthwell 12/09/13 - 08:01 am
2
0
Bill Walker

I love this man. I spoke to him at great length in 2010. I believe he is honorable and has Alaska’s best interest at heart. I did everything in my power to have him placed on the 2010 ballot under the Alaskan Independence Party ticket. I failed. He has wisely chosen to run as an independent candidate. However, he and his people have rejected discussing financing of an all Alaska gas line using a Bank of Alaska. We will reach out to Japan or China for funding of an all Alaska gas line. Big oil runs this State. Money will not be available unless we beg foreign nations or big oil monopolies. Establish a public Bank of Alaska and build it ourselves. He who controls the money controls everything.

beaverlooper
3102
Points
beaverlooper 12/09/13 - 04:06 pm
2
0
Stick with Parnell

Stick with Parnell,he'll have us wearing horse turds the size of diamonds.

KenaiKardinal88
474
Points
KenaiKardinal88 12/09/13 - 04:00 pm
0
3
Only An Idiot Would Burn Wooden Walls To Keep House Warm

To all you socialist Democrats out there, blaming Big Oil for your greed is a typical Obama "pivot"

Alaska is bleeding money because your liberal leaders like Mark Begich have gamed the system. Now Big Government controls so much of the economy, it's ruined our future.

State employee benefits are killing our "shared" revenue from oil production. But the Dems want less oil production, so they raise oil taxes. Typical liberal economics.

RaySouthwell
1054
Points
RaySouthwell 12/09/13 - 09:21 pm
1
0
KenaiKardinal 88

And the banks too big to fail or jail are just wonderful on what they have done to our economy. For the record the two largest municipalities that have gone bankrupt in the history of the nation (Detroit and Jefferson County Alabama) was the result of compounded interest. In the end the banks want the future 25 years of interest paid now, from Detroit and Jefferson County Wall Street bank charge was 30%. I know, you will blame the liberal politicians-Democrats and employee benefits. Just be prepared because the liberals believe Dodd-Frank has protected the people from big-banks. They are wrong. Dodd-Frank created Bail-ins. If you have retirement invested in the big banks it will be taken the next time Wall Street is in trouble. No more bail-outs, now bail-ins. I just wonder what will happen to the millions Alaska has invested in the Mega-Banks?

Perhaps we should take our money out and establish a public Bank of Alaska.

Norseman
3593
Points
Norseman 12/10/13 - 04:39 pm
2
0
“The new forecast from the

“The new forecast from the Department of Revenue predicts state income is suddenly expected to slide by billions, creating a deficit of $2 billion this fiscal year. The state will have to use about one-eighth of its easily-available rainy day savings to pay the bills. This comes six months after lawmakers and the governor described the budget as the embodiment of fiscal restraint.”
.....
from the Alaska dispatch

RaySouthwell
1054
Points
RaySouthwell 12/10/13 - 05:47 pm
2
0
Norseman

Public Banking. Cut out the monopolies and support small companies. $16 billion in our "rainy day fund." Place it in a public Bank of Alaska and then do as the private banks do with our $16 billion. Create credit and lend out as much as 10 times the $16 billion. Then collect interest for the Bank owned by the people of Alaska. What would be the interest income on $160 billion? How much do the private banks share with Alaska for the privilege of holding our money in a rainy day fund?

Raoulduke
3055
Points
Raoulduke 12/11/13 - 08:19 am
2
0
buying in

Alaska has been predominately Republican since the mid 70's.The Alaskan's have elected,reelected,and elected again their answer for betterment.Well! The Alaskan political arena with all of it's corrupted politician's.Remember!Petro-Politics=CORRUPTION.They have taken from under your noses the Alaskan's prime rib,and in return.They give you the excrement from the prime rib,and the Alaskan appears to be as happy as a pig in slop.Keep voting the same party,and people.But do not expect better from doing so.Just expect the excrement to become even more odoriferous

RaySouthwell
1054
Points
RaySouthwell 12/11/13 - 09:34 am
2
0
Raoulduke

Democrats are just as frightened as Republicans. Big oil has big money and power everywhere. Until Alaskans recognize this fact and establishes a public Bank of Alaska nothing will change. The world revolves around money and oil. We have a lot of each. But we must access both for a productive economy.

KenaiKardinal88
474
Points
KenaiKardinal88 12/13/13 - 01:58 pm
0
4
Unfunded Liabilities - Billions to Unions and Dirty Democrats

Parnell is doing the right thing, however it's not going to be enough. The unlimited demands of the unions, government employees and rural residents are destroying the state budget.

I suggest we shut down all set net sites, capture the fish as they enter the river, put the revenue in the state bank account.

Liberal Democrats and their media lap dogs have destroyed the American Dream on a national level with Obama, and are ruining it on the state level thanks to Anchorage Liberal Begich.

Raoulduke
3055
Points
Raoulduke 12/14/13 - 04:12 am
1
0
Unions

KK-88 I don't know where you are gathering your info,but if it were not for UNIONS.You would be making NO minimum wage,and you would be living in the MASTERS row houses.Quite similar to the 1800's coal miners of Pennsylvania.The working conditions would be deplorable.Do some REAL research on the rise of unions,and since the REAGAN Administration.The Republican UNION BREAKING.So! far I can almost quote RUSH,BECK,and FOX from your statements.Keep following the your shepherds.But I would prefer.You think for yourself.

RaySouthwell
1054
Points
RaySouthwell 12/14/13 - 07:59 am
1
0
Think for yourself?

I keep looking for thinking people. Raoulduke you are just like KK88. Following the talking heads to keep us divided. Where is our common ground. I think as President Kennedy did.

"Our most basic common link is that we all inhabit this planet. We all breathe the same air. We all cherish our children's future. And we are all mortal."

He understood money creation and would have united people through a sound economic plan. He who controls the money controls everything.

We just don't get it.

Raoulduke
3055
Points
Raoulduke 12/15/13 - 02:54 am
0
0
thinking

I am not for any of this divisiveness,but it is extremely difficult finding common ground.Especially with the blinder wearers.I at least research BOTH sides.Then I make up my OWN mind.I do walk my own path,and Like Groucho Marx said" I would not belong to any club that would have me"

RaySouthwell
1054
Points
RaySouthwell 12/15/13 - 08:38 am
0
0
We all wear blinders

Raoulduke. Our government kills innocents and we do nothing. We worry about the poor and national debt and we do nothing. Our military expenditure is larger than all other nations combined and we do nothing. Our government ignores corrupt individuals in the banking system and we do nothing. NSA spy on us all and we do nothing. I could go on but what is the point, we all where blinders. But back to the topic, politicians are just a reflection of who we are as a people.

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