Parnell Releases Next Year’s Budget Proposal

Dave Donaldson, APRN – Juneau

Governor Sean Parnell on Wednesday presented the starting point for legislative debate over next year’s budget. Calling Alaska for more development of the state’s natural resources, he told the Anchorage Chamber of Commerce – and later in a press conference – that his focus is on making the most of what Alaska has to offer and being ready for whatever happens with the rest of the nation.

Parnell says the state is sitting on some $12 billion in reserves that would, if necessary, carry through two years of normal state spending with no additional oil revenue.  It is even enough, he said, to get through one year without any federal money.  His goal, he said, is to maximize the state’s huge opportunities – both in cash and natural resources.

“Alaska is a storehouse, not a warehouse, of resource wealth.” he said.  “We have huge reserves of oil and gas.  At least 43 billion barrels of oil and 250 trillion cubic feet of natural gas yet to be developed, rich deposits of minerals are in the vault waiting to be unlocked on more than 40 million acres of state land.  And Alaska harvests more pounds of seafood each year than is annually consumed by this nation. Folks, we’re a storehouse of resources that we need for our jobs and that America needs to sustain itself. “

Parnell’s major budget emphasis on new spending for energy that will help create infrastructure opportunities for years to come.  He said the budget reflects spending to use the energy of water – and other renewable energy sources – $65 million to jump-start the Susitna hydroelectric dam,  $25 million for renewable energy grants, $10 million for a Southeast energy grant fund, and $25 million for weatherization programs. 

“We’re going to work – and we are working – to proactively meet Alaska’s energy needs from both sides” he said. “We’re developing more and we’ll be good stewards of our energy.”

Parnell’s plan also spends about $175 million to continue work on the natural gas pipeline from the North Slope to Canada – as well as paying for the next phase of work that needs to be done on developing an in-state gas pipeline to the Railbelt and SouthCentral.

Parnell referred to several of his priorities from last year that are in the budget the legislature is getting – such as more money to fight Domestic Violence and Sexual Assault,  merit-based scholarship for graduates of Alaska’s high schools, and money to upgrade state buildings where maintenance has been deferred. 

However, the budget is now in the hands of the Legislature – and the governor will have to justify what he has given them.   Senate Finance Co-chair Bert Stedman,  he says he’s disappointed that the governor is using savings set aside in the current budget – and has prepared a budget that draws a small amount from reserves next year.  Stedman says the legislature has set aside the $12 billion the governor points to.  And he wants to set aside even more.

 “It leaves you no ability to set money aside for the challenges that we’re going to face in the future when we have a problem with our oil supply or a spike down in our pricing on oil,” Stedman said.  “I want to see our savings increase over the next couple or three years.  Preferably we can do a little bit every year. We’ve got roughly 12 or 13 billion in excess liquidity layed aside right now – not counting the permanent fund.”

Stedman praises the governor for slowing down the rate of growth on the operating side of the budget – to approximately 1.9 percent over next year.   He says the finance committees will decide what changes to make to the budget – he declined to point to anything that needs reducing at this time.

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