Capital budget could grow: Debate more amiable than last year

Posted: Friday, March 19, 2010

Legislators are expecting this year's capital budget, the one-time spending on big-ticket items, to be beefier than last year's, as the state hopes to fend off a recession that has not hit Alaska nearly as hard as elsewhere.

Legislative budget writers want to spend more than Gov. Sean Parnell has requested, and are hoping that doing so will help prevent Alaska from slipping into a recession that's hit the Lower 48 much harder than it has here.

"I would say we're looking at a larger capital budget than the governor has proposed," said Sen. Lyman Hoffman, D-Bethel, co-chair of the Senate Finance Committee.

Parnell, he said, has publicly said he expects more additions to the capital budget.

"He said he left room for the Legislature to come up with projects, and (Parnell) wants to work with us," Hoffman said.

Rep. Bill Stoltze, R-Chugiak, said he expects the House to approve more capital spending than the governor proposed, but not as much as the Senate wants. Stoltze is co-chair of the House Finance Committee with responsibility for the capital budget.

Despite disagreement over some aspects of the budget process, this year's capital budget debate between the House, Senate and Parnell appear much more amiable than last year when former Gov. Sarah Palin had a locked heads with legislative leaders.

The capital budget process typically begins with a budget submitted by the governor, with the Legislature then adding favored projects.

In previous years, legislators said they felt Palin set them up when she refused to tell them how much she was willing spend and then later bragging about vetoing items legislators said they wouldn't have included in the budget if they'd been told how much she was willing to spend.

In the process, Palin had vetoed some projects she had originally requested herself in her own budget presentation, and also vetoed cruise ship head tax projects for Southeast, even though that money is still required to be spent on cruise related projects.

Top priorities for the Juneau delegation this year are continued improvements to the Johnson Youth Center and additional cruise ship head tax funds.

Other budget items include authority to spend $60 million already allocated to build a new Alaska Class ferry.

A separate local project, the Subport office building, would be funded by the Alaska Mental Health Trust and is not included in the capital budget.

Rep. Beth Kerttula, D-Juneau, said she agrees with the Senate Finance Committee's goals of using the capital budget to try to keep the state's economy going.

"We need things that stimulate the economy and create jobs," she said.

It will also likely incorporate Parnell's requested $100 million spending on rehabilitating the state's aging infrastructure, legislative budget writers say.

"Most likely we are going to end up with one capital budget," Hoffman, said.

A request by Parnell to approve funding for the infrastructure projects by March 1 so as to make sure the entire summer construction season is available was rejected by legislators, but some have suggested that the bill approval process could still be hurried, such as earlier effective dates than usual to help get projects started quickly.

After the clash with Palin, in which legislators and the governor tried to one-up each other by cutting money from the budget, some senators now say that lack of capital spending in the state threatens the economy.

After cuts from proposed spending last year of about $500 million, Hoffman said this year's budget should be considered spending for two years.

"I would say we're behind the eight ball by about half a billion dollars as it is," he said.

Stedman said the state's capital budget should be considered a two-year budget.

"It will be pretty minimal when you divide by two," he said.

Contact reporter Pat Forgey at

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