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Governor Parnell Reduces State Spending


Prioritizes Jobs and Families

June 3, 2010, Anchorage, Alaska - Governor Sean Parnell today signed into law the three major appropriations bills: House Bill 300, the FY 2011 Operating Budget; House Bill 302, the FY 2011 Mental Health Operating and Capital Budget; and Senate Bill 230, the FY 2011 Capital Budget, which also includes FY 2010 capital and operating supplemental appropriations. 

Governor Parnell has provided detailed information on capital projects across the state on the governor's website at:


Spend Less, Save More, Invest for the Future

"We will grow Alaska by investing in infrastructure while spending less and saving more for the future," Governor Parnell said. The governor reduced the operating and capital budgets by $336 million through line-item vetoes. "In reviewing the budget, I funded constitutionally established priorities -- resource development, education, public safety, and infrastructure. With these reductions and the surplus revenue projections for FY 2010 and FY 2011, more than $400 million will be saved for future investment," the governor said.

Jobs Now

The capital budget contains $1.26 billion for transportation, including highways and aviation projects; $88.5 million for water and sewer projects; $451.6 million for K-12 education and university projects; $123.3 million for deferred maintenance projects; and $77.2 million for renewable and other energy projects. Funding for fire stations and emergency services, seniors and elder care facilities, port and harbor development was also approved, along with $20 million for the Port of Anchorage, $40 million for the Tanana River Bridge, and $35 million for the Port MacKenzie Rail Extension. "These are significant economic development projects that will create jobs and economic growth," the governor said. 

The budget also includes $397.2 million in general obligation bonds for education-related facilities, including the University Life Sciences Building in Fairbanks; K-12 schools in Alakanuk, Kipnuk, and Kwigillingok; the Near Island Research Facility in Kodiak; University of Alaska facilities in Mat-Su, Anchorage, Kenai, and Valdez; K-12 and vocational education facilities at Mt. Edgecumbe High School and Klawock; and expansion of the state museum in Juneau. These projects will appear on the November general election ballot.

"These new capital dollars, along with more than $750 million in projects from previous capital budgets that are on the streets now, will put Alaskans to work," Governor Parnell said.

The budget also includes funding for accessing resources in the Foothills region, the Ambler mining district, and to Western Alaska. 

Both the in-state and the large-diameter gas line projects are funded to bring Alaska's gas to Alaskans and to markets in the Lower 48. 

Healthy Investment, Predictable Spending

The spring revenue forecast of $5.3 billion in unrestricted general fund revenue for the next fiscal year is based on an average price per barrel next year of $77.65.

"Because Alaska is so dependent on volatile oil revenues, it makes sense to look ahead 10 years and save for the day when we again are likely to have a sizeable deficit," Governor Parnell added. "The global economy is still struggling and that impacts Alaska's revenue stream. A more sustainable level of spending allows us to save more now so we can meet our constitutional obligations in the future. I have made reductions while maintaining a focus on life and safety needs, building infrastructure, and providing jobs now while using an even-handed approach across the state." 

The capital budget passed by legislators, totaled $3.2 billion. Governor Parnell met with nearly all 60 legislators over the past month to discuss their capital budget priorities. After working to address legislators' priorities, Governor Parnell noted that many of the projects that were reduced or vetoed would be considered in a future budget. 

Operating Budget Reductions

House Bill 300, the operating budget bill, includes funding for public education, the university, public health and safety, transportation, and resource development.  Governor Parnell reduced operating budget appropriations by $36 million.

"My initial spending plan limited growth in state agency budgets to 2.2 percent, which was a significant reduction from the 10 percent that was requested," Governor Parnell said. "The Legislature shares my concerns with the size of the budget and maintained that budget discipline as they worked on the operating budget."

In the operating budget, Governor Parnell vetoed money associated with SB 13 (Denali KidCare expansion), as he opposes expanding eligibility and funding for publicly funded abortions.

HB 302, the state's mental health operating and capital budget, totals $216 million.

"The spending plan I signed today will build Alaska's infrastructure for economic growth, fully fund public education and public safety, and address high-priority projects in districts across the state," Governor Parnell said. 

Copies of the budgets and related documents are available at:http://omb.alaska.gov/11_omb/budget/index_FY11_Enacted.htm

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