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Parnell announces $12.8B proposed state budget

Published on NewsOK Modified: December 14, 2012 at 8:05 pm •  Published: December 14, 2012

ANCHORAGE, Alaska (AP) — Gov. Sean Parnell on Friday announced a proposed state budget that would limit growth in operating costs to less than 1 percent.

At a news conference after unveiling the numbers in a speech to the Anchorage Chamber of Commerce, Parnell said he is proposing an operating budget that spends $9 billion overall and a state general fund portion of $5.7 billion.

That's 0.8 percent more than this year, he said.

"That is a level of increase that has not been seen in some years," he said.

Alaskans are not likely to detect changes in the bureaucracy. The lack of growth comes from anticipated savings in Medicaid costs, Parnell said.

Overall, state spending will be down nearly $1.1 billion from this year, Parnell said.

The big difference will be spending for buildings and other facilities. Parnell proposed a capital budget of $1.8 billion, down from this year's $2.9 billion. The state general fund portion of the capital budget would be $795.2 million, down from $1.9 billion this year, a reduction in state general fund spending for capital projects of 59 percent.

Projected general fund revenue is just more than $7 billion. Parnell anticipates a $508 million projected surplus.

Matching last year's budget would have required a dip into a state savings account.

"I don't intend to do that," Parnell said.

Parnell will pitch the proposal to a legislature controlled by fellow Republicans. House Speaker Mike Chenault of Nikiski called the proposal a fair starting point for budget discussions.

"His proposals acknowledge the current reality: North Slope oil production is declining, and the high cost per barrel today is the only thing keeping us ahead," he said in a release.

Parnell said he will push key initiatives in public safety, resource development, education and transportation.

He is continuing the 10-year initiative he announced in 2009 to reduce "epidemic" rates of domestic violence and sexual assault. Under the heading of the "Choose Respect" campaign, Parnell is proposing $15 million, including $3 million for prevention, $500,000 for shelters and services, and $2 million for child abuse prevention and treatment.

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