Proposed $9 billion operating budget goes to Alaska Senate

March 23, 2011 

JUNEAU -- The Senate Finance Committee is considering a nearly $9 billion state operating budget, slightly more than the Alaska House passed, slightly less than Gov. Sean Parnell proposed.

Differences between the House version and the one ultimately passed by the full Senate will be settled in a conference committee. The House passed its $8.9 billion spending plan with little fanfare though Democrats tried unsuccessfully to get money back into it for such things as a pre-kindergarten pilot program.

Among the more controversial aspects of the Senate plan is a proposal to swap the $8.2 million that Parnell requested for merit scholarships with the $1.1 million he put toward a program for students with financial needs.

Parnell has seen this as an affront to one of his top legislative priorities, though concerns have been raised among lawmakers about whether students will have equal access to the classes they need to qualify for the merit scholarships. There has been testimony, too, that the needs-based AlaskAdvantage program has been underfunded and unable to meet demands.

The Senate bill also rejected requests by the governor to add a public records attorney to the Department of Law and allocate $175,000 for outside legal counsel to help with federal environmental litigation.

It also denied $3.6 million to begin preliminary operations of the Goose Creek Correctional Center. Leaders of the finance committee have expressed interest in auditing the prison after it was learned that running the facility would cost the state 3 1/2 times what it now spends to outsource inmates to a Colorado prison.

The overall proposal is about $10 million more than the House version and about $8.6 million less than Parnell proposed, according to a legislative fiscal analysis. The finance committee has been taking public comment on its plan.

The operating budget is only part of the state's overall spending, albeit a large part.

Lawmakers still must finish a supplemental spending bill to help address additional costs that have arisen this fiscal year, plus craft a capital budget for next year. Parnell has proposed an estimated $1.9 billion capital spending plan but that's expected to grow -- perhaps substantially -- when lawmakers write their version.

The co-chairs of the Senate Finance Committee have said they believe the state can afford a "healthy" capital budget, though they have also made clear their desire to see money put into savings first before the spending begins.

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