Kudos to Palin for tightening the state's belt

Posted: Friday, December 19, 2008

In this time when many of us are forced to tighten our belts, it's good to see the state doing the same.

Gov. Sarah Palin's announcement that she's asking department heads to cut back on their budgets will help rein in unnecessary spending.

Palin is proposing a 7 percent decrease in the operating and capital budgets for the next fiscal budget, which starts July 1.

The operating and capital budgets total $4.9 billion in general funds and $11.2 billion in total funds.

Of course, the surplus we gain depends on the price of oil, a price experts say will hit $74.41 per barrel next year. That figure would bring the state $5.2 billion. If it does, the surplus would total $388 million, which would go into the Constitutional Budget Reserve at the end of the year.

That's an optimistic forecast, considering oil prices dropped even further Thursday hitting a new low at $30 a barrel.

Who knows what is in store in the next six months, but any shortfall could be covered by funds from the state's savings accounts. Over the past two years, the state has been able to put $5 billion in those accounts.

"The spending plan is based on prudent principles because the principles never change, whether the price of a barrel of oil is $40 or $140," Palin said. "Fiscal discipline, pursuing responsible resource development and a stable economy in the midst of changing financial conditions, those are the principles that don't change."

In case you missed it, some items in Palin's budget include:

* $1.7 billion in capital projects;

* $1 billion for K-12 education, including $118 million for intensive needs students and $40 million for major maintenance of schools;

* $451 million for full funding of retirement costs unfunded liability;

* $300 million for oil and gas exploration tax credits;

* $60 million for community revenue sharing;

* $82 million for gas line projects, including $20 million for the Alaska Gasline Inducement Act reimbursement fund;

* $887 million for capital federal highway, aviation and water projects, including an $88 million general fund match; and

* $98 million for capital energy projects.

Alaska Public Safety Commissioner Joseph Masters was in Kenai on Wednesday discussing Palin's budget at the chamber of commerce luncheon. Masters said Palin knows the importance of Public Safety and has proposed an increase to its budget of just over $5 million.

He said the budget expansion will allow the department to focus on three goals: 1) to continue to improve in the delivery of services; 2) to make sure it has appropriate and adequate facilities and equipment to meet its mission; and 3) to assume more statewide leadership.

"It means that we recognize that if we are going to provide better services, we need to invest in initiatives that capitalize on our people, development of skills and make investments into technologies that make us more effective and more efficient," Masters said.

It sounds to us like goals all of the Alaska departments need to strive for.

No one expects 2009 to be a walk in the park; there's so much uncertainty in the air. However, with a solid proposed plan, we commend Gov. Palin for thinking forward. It's something we will all be called upon to do in the not-so-distant future -- whether we like it or not.



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