Parnell gave no specifics on where cuts will be made during a question-and-answer period following a Rotary Club speech in Anchorage; he has until next week to finish his work on the budget and said his administration's review is continuing. But he said the record-level cuts he plans will leave Alaska with a "healthy" capital budget while also allowing the state to live within its means.
Parnell gave lawmakers a $2.8 billion capital spending limit and previously said he intended to hold them to it.
The Republican said that while Alaska is in relatively strong financial shape now, it must exercise fiscal responsibility in light of declining oil production, a sluggish national economy and state obligations that include soaring Medicaid costs and $11 billion in unfunded pension liabilities.
Oil provides nearly 90 percent of Alaska's unrestricted revenue and high prices are expected to fatten the state's coffers. Alaska currently has more than $10 billion in budget reserves.
In times of surplus, the tendency is to ramp up spending, but that's not the responsible way to go, Parnell said.
He assured the audience the state would, among other things, forward-fund education, repair public buildings, build roads to better facilitate resource development and invest in hydroelectric projects. He said there also would be money to add village public safety officers and state troopers -- this is elemental to his plan to crack down on domestic violence and sexual assault -- as well as funds for student scholarships.
Important warning about e-mails purporting to be from the adn.com staff.