Homer Alaska - Business

Story last updated at 3:52 PM on Wednesday, May 16, 2012

Parnell signs budgets with few vetoes

The Associated Press

Gov. Sean Parnell signed state budgets totaling $12.1 billion on Monday after making $66.6 million in vetoes, the smallest cuts of his term and a figure he attributed to lawmakers sticking to a spending limit he'd set.

In a speech to the Anchorage Chamber of Commerce, Parnell thanked lawmakers for their work. His conciliatory tone came after a contentious special session that saw his plan to lower oil taxes pummeled before he ultimately pulled it from the session's agenda.

He said budgets are defined by sound investments in infrastructure, education, public safety and energy.

At the urging of Parnell, House and Senate leaders worked to keep capital spending around the same level as the current fiscal year and wound up just over that amount, at $2.9 billion. That figure includes some spending for this fiscal year. Capital items for next year alone total $2.8 billion, Parnell's budget director Karen Rehfeld said. That's the same as this year.

Parnell also signed an $8.9 billion operating budget. With fund transfers and savings, the package totals $12.1 billion.

Parnell in 2010 cut more than $300 million in proposed spending, and in 2011 more than $400 million — a record — from what he considered to be bloated budgets.

The bulk of the vetoed funding this time — $50 million — came from a one-time lump sum payment to the Judicial Retirement System that Parnell said he didn't deem prudent in light of financial and economic considerations. He said the budgets honored annual payments to public employees, teachers and the judicial retirement systems.

The Republican governor also cut additional funding of about $2.2 million for pre-kindergarten grants and a pilot program expansion, and $10.3 million for a substance abuse treatment program.

Rep. Les Gara, D-Anchorage, said he wasn't happy with those cuts.

"The governor should be cutting waste, but he cut opportunity instead," Gara said.

The spending plan for the upcoming fiscal year, beginning July 1, includes an increase of about $3.9 million, or 38 percent, in funding for early learning programs, according to the administration.

In budget documents, the administration said the $4 million approved by lawmakers for pre-kindergarten grants represented a 47 percent increase over the current year. Parnell reduced that figure to $2.8 million and scrapped the $973,000 proposed to expand a pre-K pilot project.

He also reduced proposed spending for the parents as teachers program, though he said funding for that initiative still more than tripled from the current spending year, to $1 million. Gara disagreed with Parnell's decision and said that based on his reading of a fiscal note, it wasn't immediately clear to him whether Parnell had actually vetoed more than he thought in connection with the program. But Rehfeld said the program will have $1 million.

Parnell said there's a need to look more holistically at how the state addresses early childhood learning issues.

A reduction in additional substance abuse funding came because the Legislature didn't have a plan for how to use the money, he said.

Parnell asked the department of health and social services how the state could help the most vulnerable residents, such as pregnant women and families at risk, and what was reasonable to follow through on that approach. He said the response was $9 million over three years, which was included in the budget.

He also approved an additional $1.3 million in the corrections department budget for treatment.

The state currently spends more than $50 million a year on substance abuse programs for about 7,100 people, he said.

Other vetoes include $1 million to the Alaska Moose Federation for moose rescue and relocation. Parnell said decisions on relocating adult animals belong to the state Department of Fish and Game and Alaska Board of Game, though he said he supported an increase in the orphaned calf rescue aspect of the federation's work.

Along with the budget, Parnell also signed a roughly $453.5 million bond package that voters will be asked to decide in November. The proposal includes 36 projects statewide, including $50 million for the Port of Anchorage expansion project.