Capital budget holds plenty for peninsula

‘Bloated’ state spending plan set to spend millions here

Posted: Friday, May 12, 2006

Alaska lawmakers this week said yes to the state’s largest-ever capital budget, and while it included a lengthy list of projects big and small for Kenai Peninsula communities, members of the peninsula’s legislative contingent expressed a measure of chagrin over its enormity.

Cheryl Frasca, director of the Office of Management and Budget, said the final numbers were still in flux and would be for a couple of days. The best available numbers Wednesday evening showed total capital spending of $2.25 billion, including $705.4 million in general funds, $1.27 billion in federal funds, and $271.8 million in other funds.

Whether that much money actually will be available, however, is still a question. The capital budget was built on a presumption that a Petroleum Profits Tax would be in place. Tuesday night, the Senate failed to concur with House amendments and no PPT was adopted. At a joint session of the Legislature on Wednesday, Gov. Frank Murkowski said, “We will resolve that.”

Kenai Peninsula lawmakers who could be reached Wednesday gave the budget mixed reviews.

“Bloated,” said Sen. Tom Wagoner, R-Kenai. “It’s unbelievable what we have done.”

Wagoner said he’s most worried that if the price of oil should fall, the budget would have to be cut back. He said pressure by the governor led to the passage of the spending package.

“The governor was buying votes so fast trying to get the low PPT in place,” Wagoner said. “It’s ironic. There’s so much money now that he can buy votes, but there won’t be enough money in the future.”

“The only thing I’m proud about on the budget is that we took almost $700 million out of it,” Rep. Kurt Olson, R-Kenai, said Wednesday morning. “It will be used for education funding and other purposes next year.”

Olson said he was disappointed more money wasn’t focused on the Public Employee Retirement System and Teachers Retirement System shortfalls. The capital budget included grants to municipalities designated for retirement accounts.

Rep. Mike Chenault, R-Nikiski, had similar feelings, though like Olson, he said he was glad some money had been saved for next year. Compared to capital spending just a few years ago, the new budget is huge, he acknowledged.

“That’s always been a concern of mine,” he said.

However, past budgets had put off maintenance on much of Alaska’s infrastructure, things the capital budget addresses.

“We’re paying that price now,” he said.

Senate Majority Leader Gary Stevens, R-Kodiak, agreed the capital budget spends a large amount of money, but he suggested people look at it as “a catch-up” budget for the lean spending years in the recent past when there was no money to accomplish many worthwhile projects.

“I’m happy about it. I don’t feel guilty, when we’ve got extra money, spreading it around the communities and getting projects that have been on the lists for years going.”

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