Gov. Sean Parnell hopes to jumpstart a major hydroelectric project that would provide a much-needed energy supply for the Railbelt with more than $65 million.
The money for the Susitna River hydroelectric project is a significant component of the governor's $11.1 billion spending plan for fiscal year 2012, unveiled Wednesday at a packed Anchorage Chamber of Commerce luncheon. The budget seeks to encourage resource development -- and job creation -- with substantial spending on renewable energy projects, roads to potential oil, gas and mining operations and other targeted development efforts.
Parnell, who was elected to a full term in November after filling out the last 18 months of former Gov. Sarah Palin's term, presented his budget proposal with an easy confidence, outlining a solid direction that he intends to take the state over the next year and even beyond. He was upbeat about Alaska's strong economy, noting that other places around the world are experiencing an "economic thrashing."
"We are in an enviable position compared to other states," Parnell said. "Alaska has a balanced budget, substantial cash reserves and a stellar bond rating."
He detailed his priorities as resource development and infrastructure, education and public safety, and said he would encourage lawmakers to work closely with him on the budget -- including holding the line on unnecessary spending in a sort of informal spending limit.
He noted he was once co-chair of the Senate Finance Committee and that lawmakers often agreed early on in the process to cap spending.
"That spending limit has been lost across the years," Parnell told reporters after the luncheon. "Now the budget gets laid on the table and the pile on occurs."
The governor's proposed FY 2012 budget is up slightly from the $11 billion spending plan this fiscal year, which began July 1. The new $11.1 billion proposal for both operating and capital expenditures includes $5.45 billion in state general funds. The rest is largely federal money, with about $1 million from Permanent Fund appropriations.
In addition to the money for the Susitna hydro project, the proposal includes $175 million to continue work on a large-diameter natural gas pipeline from the North Slope to either Canada or Valdez, perhaps both, and an in-state gas line. Of that, $160 million would go the AGIA Reimbursement Fund -- the Alaska Gasline Inducement Act programs started under Palin that gives up to $500 million in state assistance to the Alaska Pipeline Project, a joint venture of TransCanada and ExxonMobil. APP and a competing project headed by BP and Conoco Phillips are still expected to release information about contracts with potential shippers in the next three months, Parnell said.
Although Susitna hydro power would largely benefit the state's population centers in Southcentral and Fairbanks, Parnell said the budget proposal includes money for projects that would help rural areas, too. He is proposing spending $25 million on weatherization projects, $25 million for the Renewable Energy Grant Fund and $10 million for the Southeast Energy Grant Fund.
In the long run, he said, cheaper energy provided by a major hydro project translates into an economic boost that benefits all areas of the state.
The capital budget would be $1.6 billion under Parnell's plan, including $664.9 million in state general funds. Specifically, he would designate $20 million for the Port of Anchorage, $20 million for Port McKenzie rail and $10 million for the Skagway city dock.
His "roads to resources" proposal would spend $10.5 million on finishing a road from the Dalton Highway to Umiat and a road to the Ambler mining district, among other projects.
In other areas, Parnell wants to give oil companies $400 million in tax incentives to spur more investment on the North Slope. He is proposing to hire 15 new village public safety officers and three new Alaska State Troopers as part of his continuing initiative to reduce domestic violence and sexual assault. And he is hoping to put $8.2 million into his Alaska Performance Scholarships program, which would pay for college education for high-achievement high school graduates beginning next year.
Contact Patti Epler at patti(at)alaskadispatch.com