Governor Sean Parnell's proposed $12.1 budget plan for 2013 calls for maintaining tight-fisted spending. To be successful, he's intentionally kept the figure low.
Some rising costs like pension plan liabilities, Medicaid, and contractually mandated wage increases cannot be controlled, and these account for a 4.5 percent overall increase in the state's operating budget.
But for costs that can be controlled, Parnell's 2013 budget calls for spending about $600 million less than 2012, anticipating that the legislature -- which will set the budget during its upcoming legislative session -- will be more generous.
This leaves state lawmakers room to fight for projects in their home districts, tweak numbers and still deliver a budget that keeps overall spending relatively flat -- with the bonus of adding some $3.7 billion to its savings account.
"We need to set the bar lower with the legislature. It's only prudent that we keep spending at a reasonable level rather than spike it up with our surplus," Parnell told reporters at a Thursday press conference. "It's important that we not spend it all today."
Comparing the governor's 2013 proposed spending to 2012's actual spending can be done two ways.
One method is to look at total spending, including Permanent Fund appropriations. Another is to look at the budgets without expenses from the permanent fund. With the permanent fund, Parnell's budget for 2013 is $12.1 billion. Similar spending for 2012 was $12.9 billion -- $800 million more.
Looking at unrestricted general fund spending (which does not incorporate the permanent fund), Parnell is calling for $10.6 billion in 2013, while in 2012 the state spent $11.4 billion -- a difference of $611 million.
Rolling out his intended budget with built-in wiggle room could allow for a win-win situation. Parnell gets to be the governor who held the line on costs, while the people's elected representatives get to have their own successes adding in dollars for projects important back home, deleting dollars they feel are misspent.
Still, in the end, the legislature doesn't have to align itself with Parnell's mission. And Parnell doesn't have to endorse the budget lawmakers send to his desk. In fact, he touted his willingness to wield his veto authority over the past two years, nixing nearly $700 million in spending approved by the legislature.
"These budgets are about balancing competing interests," Parnell explained Thursday.
Sen. President Gary Stevens (R-Kodiak) called Parnell's budget draft "a great start," but already sees areas where he expects state lawmakers to make changes.
Parnell held costs down for 2013 by eliminating 289 vacant full-time and part-time positions. Stevens wants to know what those positions were and whether any of them were crucial. If so, the legislature may push to add some of those back, he said.
Stevens also expects the legislature to evaluate the state's spending levels for education, and to up the formula for per-student allocations, a formula that Parnell's 2013 budget did not adjust. "The need is out there," Stevens said.
He also wants to make sure money is available for heating assistance and weatherization programs. Both are programs the governor's budget is "a little light" on, he said.
Yet Stevens applauds other segments of Parnell's 2013 budget. He thinks adding more village patrol safety officers is a good idea, and supports a $350 million statewide bond package Parnell plans to advance for funding port projects statewide.
Stevens also likes the idea of putting money into savings. "The legislature in the past has been very aggressive about putting money into savings. We are looking forward to putting as much as we can into savings for the future," he said.
Parnell touted resource development, transportation and infrastructure, education and public safety as four areas the state must emphasize.
In resource development, he wants $28.5 million for roads, permitting, environmental work and right-of-way acquisition, $3.5 million to streamline the permitting process, and $3.8 million to assess rare earth elements and shale oil.
In education, he wants his merit-based Alaska Performance Scholarship program funded, $1.1 billion for K-12 education, $23.9 million for major maintenance projects and $61 million for new schools in the villages of Emmonak and Koliganek.
In the public safety arena, he'd like $11.9 million for his anti-domestic violence, anti-sexual assault Choose Respect initiative, 16 new law enforcement officers, $4.9 million to help stock emergency food supplies, and a new helicopter for rural-based Alaska State Troopers.
In transportation and infrastructure, he's looking for more than $1 billion for roads, airports, the marine highway, water and sewer projects, and harbors. He'd like a road built from the Dalton Highway to Umiat, studies done on creating a route to Ambler, and $60 million for the Alaska Class ferry project.
While Parnell expects some legislative changes, he's unwavering in his ultimate goal. "I don't expect the legislature to spend in the next year beyond what it did, with my signature, this year," he told attendees at an Anchorage Chamber of Commerce luncheon Thursday, where Parnell revealed his 2013 budget proposal.
Contact Jill Burke at jill(at)alaskadispatch.com