Our view: Parnell's money plan

His proposal even leaves room for legislators to add money for smaller-scale capital projects in their home districts. (That's a smart move. As Parnell knows from his days as a legislator, when it comes to the budget, the governor proposes and the Legislature disposes.) At Monday's press conference, Parnell said he'll work with legislators to draw a line on those additions. He wants to avoid surprises at the end of the process (something his predecessor didn't do).

All told, Gov. Parnell spends $4.7 billion of state general funds, and a total of $10.5 billion when all other items -- including federal aid, special accounts and Permanent Fund dividends and reinvestments -- are included. Those are both big numbers, but the plan strikes a responsible balance between saving and spending.

Having been a legislator, Parnell knows the Legislature won't just rubber-stamp his spending blueprint. In the inevitable give-and-take, his top two priorities will be $400 million to endow merit scholarships for further education in Alaska after high school, and $7 million for his initiatives to reduce Alaska's shameful rates of domestic violence and sexual assault. Those are both good ideas and Alaska is fortunate to have the money for them.

Parnell's budget fully funds local government aid -- a big concern for Anchorage -- and K-12 education, including a previously planned increase in the amount of aid per student. He wants to set aside the money needed to run schools the following year as well. (Forward-funding schools is a way of "saving" most of the surplus Parnell expects the state to collect.)

Ample though Parnell's budget is, it doesn't fund everything Alaskans might want. The governor says he got $1.9 billion in requests for state-funded capital projects. He pared his list down to less than one-sixth that amount. State agencies sought a 10 percent bump in their operating budgets but Gov. Parnell whittled the increase down to 2.3 percent.

Public employee unions who yearn to restore a pension system, instead of the 401(k) style retirement now given to new state employees, are out of luck. Parnell said he'd consider restoring a pension system only if shown it saves money -- an unlikely prospect.

Though his spending plan is definitely not an austerity budget, the governor is well aware that oil production is steadily declining, which could sap the state's ability to maintain services in future years. That's why he's pressing for progress on the gas line and offshore oil drilling. Meanwhile, the state has some $7 billion or $8 billion in its reserve funds as insurance against harder times in the future.

Gov. Parnell has already briefed some legislators on his budget plan. No doubt, they'll look through it for gaps and areas of flab, as well they should, but no huge fights appear to be brewing. For both politicians and Alaskans, life is definitely better with oil prices in the $70s, instead of the $30s.

BOTTOM LINE: While other states have to slash budgets, Alaska is in good shape -- at least for now.