Parnell offers conservative budget

Gov. Sean Parnell’s proposed operating and capital budgets spend $1 billion less than this year.

The governor on Friday released his budget for fiscal year 2014, which begins July first.  It totals $12.8 billion for state services and projects as well as savings.  About half of that comes from unrestricted state general fund dollars.  The rest is federal and other state funds.

“With our budget proposal, even with the spending plan we’re putting forward, we project a surplus over $500 million, so we leave room for some community and legislative priorities,” Parnell told the Anchorage Chamber of Commerce, where he announced his plan. 

But he said he already has asked legislative leaders to set a limit on their spending requests.

He called Alaska’s economy “solid,” but said he would hold the operating budget to less than 1 percent growth, due to declining oil production and lower oil prices.  The Revenue Department predicts a revenue decline of $1.6 billion for fiscal years 2013 and 2014, as production falls from this fiscal year from  nearly 552.8-thousand barrels per day  to 538.4 barrels per day in FY 2014.  Prices are forecast to average $108.67 per barrel in the current fiscal year and $109.61 per barrel in FY 2014. In FY 12, oil prices averaged $112.65 per barrel.

The governor’s budget priorities are natural resource development, transportation, education, and public safety – including an increase in the number of troopers and village public safety officers.

Parnell’s education budget calls for about $6 million for a statewide digital learning initiative as well as more funds for distance learning. The governor proposes additional money to help defray school districts’ energy costs.

 “The budget fully funds and forward funds K-12 education and pupil transportation at more than $1.2 billion, including $25 million in addition for expected energy cost increases,” Parnell said..

But Juneau Sen. Dennis Egan and Rep. Cathy Munoz say the Base Student Allocation – the amount the state gives districts for each student – is not enough.

“The governor is holding the BSA at the same level.  I think there’s going to be a lot of pressure to increase the Base Student Allocation and I support that happening,” Munoz said. “We’ll just have to see how it all unfolds as the legislative process unfolds.”

After major cuts in current year spending school districts across the state, including Juneau, are talking about even more reductions for next year. Egan says Alaska schools need more dollars for the classroom.

“When he’s talking about full increases in education funding, it seems like we’re just doing the status quo and that worries me,” Egan said.  “I was hoping that he would forward fund education so that school districts across the state would have a better handle on what they could expect.”

Parnell said his education initiatives aim at a 90 percent graduation rate by the year 2020.

Republican majority legislative leaders praised Parnell’s budget approach that reigns in spending, in light of the expectation of a revenue decline. They have already said a rewrite of oil taxes would top their agenda in the upcoming session.  The governor also is expected to introduce oil tax legislation.




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