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Parnell vetoes $67 million from Alaska budget

Alaska Gov. Sean Parnell pulled out his veto pen on Monday and struck $66.6 million from operating and capital budgets totaling $12 billion, including $1 million for a controversial program to relocate moose from cities to rural areas. 

The cuts are sparing, relatively speaking. Last year, Parnell vetoed more than $400 million.  

His biggest cut this year? Slashing $50 million slated to address long-term funding shortages for the Judicial Retirement System. In a press conference, he told reporters the state continues to meet its current obligation to retirees, and that this new budget provides $613 million to do just that for those in the judicial system, as well as retiring teachers and public employees.

But how to address forecast shortages? That needs to be looked at further, and it should be handled consistently for each retirement program, Parnell said. This extra lump-sum payment would have addressed only part of the $58 million shortage in the judicial retirement system, while other state-retirement programs received no lump-sum boost. 

Parnell also cut $10.3 million from a proposed $19.3 million substance-abuse-prevention effort planned by the Health and Social Services Department. The cut leaves $9 million for the three-year effort.

Parnell noted that the state already spends $50 million to help 7,000 people deal with addiction.

The veto came in part because the request for additional money came with no "detailed" explanation from the Legislature, he said. Parnell said he met with department officials, who said the $9 million that remains will allow them to provide services for groups such as pregnant women, at-risk families and for rural residents who might benefit from distance therapy.

Even with the veto, funding for substance abuse will expand in this year's new budget by 10 percent, if you include $3 million for the new three-year plan and other projects, including an additional $1.3 million to treat addiction in prisoners, Parnell said.

Parnell also praised the Alaska Moose Federation's work in the press conference, including its new effort to keep the animals away from highways to protect them and drivers. But he believes relocating adult moose from urban to rural areas are an Alaska Department of Fish and Game function. That said, he added that with approval from Fish and Game and the Board of Game, he might one day support adult moose relocations.

Others have not been so generous. Some of the group's projects have been blasted by wildlife experts -- here and here -- as a looming failure and waste of money.

The veto leaves $500,000 to support the group's efforts to rescue orphaned moose, a state-permitted effort that allows the group to rescue orphaned calf, nurse them back to health and release them with collars for tracking, Parnell said.

Other vetoes included:

  • $1.2 million from pre-kindergarten grants, leaving $2.8 million, still a 47 percent increase over the current year.
  • Cutting $2.9 million from pupil transportation funding and early learning coordination, leaving $492,500. Those are "reasonable start-up funds for new program," the veto explanation says.
  • $300,000 from the World Trade Center's International Trade Partnership Project, leaving nothing. "Existing funds available," the veto explanation says.
  • $973,000 from Alaska pre-kindergarten pilot project.

More information on the budgets is available here and here.

Contact Alex DeMarban at alex(at)alaskadispatch.com

The governor's full press release associated with the budget is below:

Governor Sean Parnell today signed into law three budget bills for Fiscal Year 2013. The governor also signed into law a $453.5 million general obligation bond package for statewide transportation projects that will go to the voters in November. 

The budget bills passed by the Legislature maintain the spending limit set by Governor Parnell and focused on the administration’s key priorities of education, public safety, military support, transportation and infrastructure, and resource and economic development.

 “Maintaining spending discipline, focusing on our constitutional priorities, investing in infrastructure to build economic opportunity, and saving for the future are vital components of the budget approved for the upcoming fiscal year,” Governor Parnell said. “I appreciate the detailed legislative work on the budget and legislators’ willingness to join me in limiting spending.” 

Governor Parnell exercised his constitutional line-item veto authority to reduce spending. The governor vetoed a total of $66.6 million, largely from operating items. 

The operating and capital budgets now total $12.1 billion, including $7.9 billion in state general funds. Total state operating budget growth has been limited to 3.3 percent. The budget includes full funding for K-12 education, Medicaid, retirement system unfunded liability, debt service, and employee contracts. The capital budget totals $2.9 billion, including $1.9 billion in state general funds.

Boosts Savings 

Two billion dollars of surplus funds were moved to savings with the potential of up to $3.4 billion going into the Statutory Budget Reserve based on projected FY 2012 and FY 2013 balances.

“Maintaining strong cash reserves and budget discipline are critical components of our long-range fiscal plan,” Governor Parnell said. “Given the steady decline in oil production and the volatile nature of oil prices, we will need cash on hand to provide state services in the future.”

Resource Development and Transportation Infrastructure 

The capital budget will fund many important transportation and infrastructure projects across the state. 

More than $1.6 billion was appropriated for highways, aviation, the Alaska Marine Highway, harbors, village safe water, and municipal water and sewer projects. The Roads to Resources initiative was also funded allowing work to continue on a road to Tanana, the Ambler District Road, a road to Umiat, and improvements on the Klondike Industrial Use Highway to Skagway.

Another $50 million was set aside in the Vessel Replacement Fund as a down payment on the second new ferry for the Alaska Marine Highway System. 

 Education

Direct K-12 education funding increased $50 million in the signed budgets. The total state funded K-12 education and pupil transportation budget for FY 2013 is $1.2 billion. New legislation increased pupil transportation funding and resources to expand vocational education funding from grades 7 through 12. In addition, the state directly funds more than $329 million for school district retirement system unfunded liability for the Public Employees’ and Teachers’ Retirement Systems. The capital budget also includes over $431 million for school and university projects statewide. 

Public Safety

Nearly $12 million in additional resources to combat domestic violence and sexual assault are included in the operating budget for prevention and intervention, support for survivors, and law enforcement. This funding includes 15 new Village Public Safety Officers the governor requested and additional Trooper support. More than $115 million is included in the capital budget for first responders, public safety, fire and rescue, emergency response and disaster preparedness projects across the state.

Energy

The capital budget contains over $247 million for statewide energy projects including: $31.5 million for weatherization programs to help Alaskans make their homes more energy efficient; $25.9 million for the Renewable Energy Fund targeting projects in areas with the highest energy costs; and $20 million for home energy rebates.  The operating budget contains $38.2 million to fully fund the Power Cost Equalization Program, and an estimated $48 million for the Alaska Low-Income Energy Assistance Program. In addition, $125 million was appropriated for the new Sustainable Energy Fund to help finance energy infrastructure projects that will reduce the cost of energy to Alaskans.