Budget battle looms in Alaska Legislature
by Christopher Eshleman / ceshleman@newsminer.com
2 months ago | 1491 views | 13 13 comments | 5 5 recommendations | email to a friend | print
FAIRBANKS — The governor, set to propose a budget next month, says the state should help create construction jobs to spur employment. Many state leaders have said Alaska must also set new policies to strengthen its long-term economic forecast.

Those views could meet in the coming springtime budget debate in Juneau. Whether they’ll get in each other’s way remains to be seen.

Gov. Sean Parnell has previewed his budget by announcing a plan to spend $100 million on roads, airports, buildings and other ends to start catching up on neglected maintenance. He’s also called for allocating hundreds of millions in state savings and spending the interest and earnings on a new university scholarship program.

Those plans, come as some in Alaska caution that the state faces tough times ahead — and possibly serious budget problems — without an overhaul of energy taxes.

Parnell’s proposed budget for the next fiscal year, which starts next summer, will emerge within weeks.

Former Gov. Sarah Palin, amid a bleak national economic scene one year ago, pitched a tight budget. The plan’s final construction — “capital” — component wound up needing only $168 million from the state’s general fund.

Alaska has, since then, largely avoided the woes seen in other many states, where a national downturn has caused cuts in spending education and social programs.

Signs from Parnell suggest his budget, while “fiscally responsible,” could be larger than Palin’s last year. Parnell said Wednesday his spending plan will focus on core responsibilities such as transportation, public safety and education. More broadly, he said, it also will focus on strengthening the state’s economy through public projects, including work on the Dalton Highway.

“For me, it’s about jobs and families,” Parnell said by phone. “I’m definitely taking the long view.”

That view — of the economic benefit of state construction spending — could encounter hurdles in the Legislature, where some say the state must start looking at preventing future budget crises. Oil production has fallen steadily for two decades in Alaska. The state relies on revenue from that production for almost nine-tenths of state government spending, leaving many wondering if declining oil production could one day leave Alaska in a major pinch.

Rep. Mike Hawker, a co-chairman of the House Finance Committee, said relatively high oil prices have diverted attention from the real threat posed by declining oil production on the North Slope. He said state leaders should hold a lid on spending and instead focus on rewriting energy taxes to encourage more oil development and, through that, strengthen the state’s economic future.

“The governor has to find a whole lot of new jobs patching up public buildings to make up for all the high paying jobs that government policies are causing to be lost in our oil patch and other dependent industries,” Hawker wrote of Parnell’s deferred maintenance plan in an e-mail to the Daily News-Miner.

Sen. Joe Thomas, a Finance Committee member in the Senate, said the Legislature can — and should — focus both on meeting short- and medium-term budget needs and on long-term fiscal issues without one effort interfering with the other. State lawmakers should look to answer how, for example, to spark production of tough-to-develop heavy oil reserves, Thomas said Wednesday. But he doesn’t suspect lawmakers would use debate about an annual budget as leverage to advance that research, he said.

“It’s a long-term discussion,” Thomas said of resource development policies.

Contact staff writer Christopher Eshleman at 459-7582.
comments (13)
« say_what64 wrote on Saturday, Nov 28 at 04:30 PM »
Lee308, In what discipline do you teach at UAF? You look down your nose at the shovel people, (i.e.,Vocational folks), so you must belong to academia land. I've written about this very thing, not too long ago.

You may not be a professor at all and I could be very wrong. You do sound like one though!
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« Lee308 wrote on Saturday, Nov 28 at 04:06 PM »
" Samm_redux wrote on Friday, Nov 27 at 11:04 AM »

The State obligating public money to construct public works is NOT Socialism"

Sorry, but it is when the motivation is to produce jobs. Take from the rich, (taxes) give to the shovel people, poor. Socialism, just like OBOMBUS!!!

From each according to his ability, to each according to his needs, Karl Marx.
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« say_what64 wrote on Saturday, Nov 28 at 11:02 AM »
It really is good to see so many of these comments in favor of looking to the future.With out that philosophy, we have no future.

I don't think that financing for the improvement of Alaska's infrastructure and the improvement of Education opportunities, are some how, in opposition of each other. Creating jobs doesn't have to stand alone as a line item in our budget. If money is approved for infrastructure improvements, jobs just naturally follow.

The Education system within our State, provides thousands of jobs. To improve and increase Education opportunities will provide more jobs.

Both of the above issues provide some economic diversity and a sound economic base which will allow future business growth. The thing that is wrong right now, is the greed for money through selling our natural resources. Doesn't it make better sense to use our natural resources within this State, for the benefit of The State?

Our Education system and our infrastructure are both in shambles right now. Not much to be proud of. We can and should do better than that. I support the Governor's philosophy and I'm not a republican. Those two issues are too important to just brush them off as some sort of ridiculous spending attempt!
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« aktrucido wrote on Friday, Nov 27 at 08:46 PM »
Now we are told “Signs from Parnell suggest his budget, while ‘fiscally responsible,’ could be larger than Palin’s last year. ". I know I know, the intent of this is to create jobs, so it OK. Didn’t some guy named “Barry Soetoro” try the same thing? Wasn’t there protests, yelling and screaming. Oh wait he (Obama) was of the wrong party.

I can hear the wailing about this being the people money, but this includes people in the future, and oil is hardly considered a renewable resource. Its "use" should include the people of the future. Has anyone done the math on how much we would be paying if all oil revenues vanished?
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« MJHemple wrote on Friday, Nov 27 at 04:06 PM »
The people of Alaska should demand their legislators introduce immediate legislation to use part of the Permanent Fund to build a citizen-owned and operated natural gas pipeline.

Investment in oilgae farms can create tens of thousands of gallons of oil per acre per year. http://www.youtube.com/watch?v=cyoKTbxerpQ

We also need to demand they introduce legislation to legalize industrial hemp and put a hemp farm in every community. http://www.hempbuildingmaterials.com/ http://www.hemp4fuel.com/news.php?item.193.11 http://www.hemphasis.net/Fuel-Energy/fuel.htm That way, citizens can manufacture and build their own energy efficient houses, and process their own clean fuel to heat the new houses, whether in the form of oil, ethanol, coal, or pellets. The seeds are highly nutritious, so health care costs would go down if people started eating hemp seed products they grow themselves instead of the white flour/sugar diet so prevalent in too many remote communities. http://www.ratical.org/renewables/hempseed1.html

People could pay back the state once their communities were built, after their farms became productive enough to export products. (Of course, they'd use their clean, manufactured fuel to export their products.)

The plan would eliminate our dependency on big oil for state finances. Our state would be healthier in every way if we chucked the private enterprises who have only their bottom lines at heart. Oh wait, they don't have hearts! Or minds or souls or consciousness. The myth that private enterprise is best for citizens is wrong. We've seen what unbridled capitalistic greed can do to a global economy. The corporate shills love to talk about how socialism makes people lazy, but never address the fact that capitalism makes people greedy. The citizens of Alaska should take control of their own resources. In as little as five years, Alaska could be energy independent, and well on its way to producing as many products as our imaginations can muster. http://www.hemptraders.com/
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« Samm_redux wrote on Friday, Nov 27 at 11:04 AM »
The State obligating public money to construct public works is NOT Socialism. The contracts are low-bid to private sector companies and the jobs are private sector jobs, no different than when a private entity hires a contractor to build something. Construction of roads, airports, schools, etc., are all within the bailiwick of government (read your Constitution fellow Alaskans...) to fund and maintain... Parnell is right on the mark with this proposal.
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« Americaisgreat123 wrote on Friday, Nov 27 at 08:53 AM »
Rep. Hawker is right. We do need to re-write tax law so we stop losing jobs from oil companies not wanting to take the risk with Alaska. We keep trying to kill the goose that lays the golden egg.

Those oil companies are more than happy to go invest in Dubai (even with their huge debt in the news today) because they aren't raising taxes on them left and right. They treat them with respect and as a partner. They know they they also benefit from them being there. They are apparently smarter than Alaskans. They can think ahead better.

Government policy needs to be consistent. If they are always changing policy, investors will not invest their money. Alaska keeps electing idiots to the state legislature that promise the world but really shoot us in the foot through good intentions that have their opposite intended effect.
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« GreatAmerican wrote on Friday, Nov 27 at 08:06 AM »
It always amazes me how some of us whine about our budget when we live in one of the richest, if not the richest, states in the Union. We need to find a way to pay for what the people need and want within reason. Proper planning for the future is all it takes.

They have done nothing but talk about a natural gas pipeline for the last 30 years and still all they do is talk. They had mock up plans for Illinois road on display in Denali state bank close to 20 years ago. Now they just recently started doing work on the project. Its these sort of projects that we need to develop and execute faster to build for the present and to keep up with the future.



Our politicians and we the people need to think not only of the present but of the future.

As for the state to create jobs that's what government does. They build the roads and the infra structure not private enterprise. They plow the roads so you can drive to work safely. Its not socialism its how its always been done in the USA.

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« icedberg wrote on Friday, Nov 27 at 07:47 AM »
Have no fear Tammie is on the way to save the day...
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« Theabowman wrote on Friday, Nov 27 at 07:15 AM »
I am struck by the irony of how similar Parnell's budget proposal is to Obama's stimulus plan. I'm not bothered by it-just find it kind of ironic that a pol supported by the Club for Growth would propose such a budget.
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« Skinfish wrote on Friday, Nov 27 at 07:11 AM »
Now, now it's only socialism when the other guy gets the $/job. When the govt gives that stuff to me it's my just desserts.
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« out_in_the_cold wrote on Friday, Nov 27 at 01:31 AM »
The need for Public infrastructure in Alaska is so obvious that even a blind man should "see" the problems.

Limited surface transportation capabilities (ie. roads and railroads) to most of the state, and what few there are full of pot holes.

Water and sewer systems are about as leaky as Old Faithful, if they exist at all in rural Alaska.

Public buildings for the most part are in such sad state of affairs with leaky roofs, sparking electrical systems, cramped and inefficient space even for a leprechaun .. not to mention they are so energy inefficient and violate about every safety code and handicap access regulation and law on the books.

Yep, we got some high roller politicians called "conservative" thinkers, who would rather throw tens of billions of dollars out the window with Wall Street stock market deals and slush fund piggy banks .. but won't spend a dime to improve the quality of life in Alaska.
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« Lee308 wrote on Thursday, Nov 26 at 11:34 PM »
The state to create jobs???? News flash, Alaska to become Socialist utopia.. Welcome comrades!

From each according to his ability, to each according to his needs, Karl Marx.
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