Lawmakers add projects to already large capital budget

"I think the Senate Finance Committee is on a path to a bloated capital budget. If they continue down this road they're going to spend about $3 billion," Parnell said.

He said he wants "this path arrested and changed" before the Legislature adjourns for the year on April 18. Parnell has the power to veto projects.

State senators were huddling Thursday to decide which additional projects will appear in the capital budget when a bigger version is released Saturday. Members of the House, meanwhile, were working to craft an additional package expected to include hundreds of millions of dollars in bonds for construction projects left out of the budget.

Senate Finance Committee co-chair Bert Stedman said the state is far behind on road work, building maintenance and other infrastructure, while it is sitting on a huge surplus of funds from the high oil prices.

"Fact of the matter is we need to get some building going on in this state," Stedman said. "You can't create jobs, put men and women to work, by putting all of your billions into savings. And we're forecast to have $12 billion in savings a year from now."

Parnell said all the planned spending could have a negative effect. "One of the concerns that I have is if they supercharge or overheat the economy with too many capital dollars, that will result in Alaska jobs being taken by outsiders who are coming here for those jobs," he said.

The 103-page spending plan includes earmarks for projects all over the state. There's money for roads, power projects, museums, libraries, harbors, school maintenance, court buildings, and more, including $7 million in deferred maintenance on the Governor's Mansion in Juneau.

The additional bond package being created in the state House would have to go before voters, unlike the capital budget. The bond package could include money for rural schools, a new sports complex at the University of Alaska Anchorage and a science center at the Fairbanks campus. It won't include money for a new crime lab in Anchorage, and lawmakers said that project might not be funded this year. The bond package could be publicly released as soon as today.

Senate Minority Leader Con Bunde said the size of the capital budget is "breathtaking" and comes on top of a big one just a couple of years ago. He called the amount of spending shortsighted, given declining oil production in Alaska.

"In my view we're going to be broke in a not-too-distant future," said the Republican from Anchorage.

Stedman said Alaska's economy needs the infrastructure. He said legislators who don't think their districts should get state money can give it up.

"I'd really like to take your portion that you feel the citizens that you represent (don't) deserve, and bring it into Southeast so I can build my intertie. And a couple of hydros," said the Republican from Sitka. "And we'll even name it after you."

Members of the Senate majority said the Legislature has put billions into savings in recent years. They said they're making up for a bare bones capital budget last year and catching up with projects for unmet needs.

Stedman wouldn't say how high he wants the spending to go, although he said there is a target amount. The spending plan already includes more than $1 billion in state general funds, which would be among the largest amounts spent in a capital budget in state history. The budget currently totals $2.2 billion when federal dollars are included.

Stedman said the Senate took out $488 million in projects last year when paring down the budget. Up until now all the Senate has done is just put about that same amount into this year's capital budget on top of what the governor himself proposed should be spent, Stedman said.