Report offers sobering assessment on AK spending

Published on NewsOK Modified: January 14, 2013 at 5:22 pm •  Published: January 14, 2013
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Parnell's budget director, Karen Rehfeld, said the governor has proposed a "very, very lean budget" as a starting point for lawmakers. He also plans to introduce a proposal to overhaul the state's oil tax system, a move aimed at encouraging more investment by oil companies and new production.

Rehfeld said in a recent interview that Parnell has continued to focus on priorities, such as resource development and energy concerns, while still managing the budget. As part of a 10-year strategy, the administration is looking at diversifying the state's revenue base from predominantly oil to a mix of oil and natural gas. It also lays out the challenges that must be considered while providing "an acceptable" level of government services, including tax credits for oil and gas, the unfunded liability for public employee pensions, addressing the high cost of energy for Alaskans and "shoring up" aging state-owned infrastructure.

The Legislative Finance report says continuing the historic rate of growth, or merely staying at the current level of spending, "could produce multi-billion dollar deficits in the near future."

It points out several pieces of the governor's budget that lawmakers might want to take a closer look at, noting, among other things, there will likely be pressure to increase funding for education and that partial funding of infrastructure projects, while it allows for more projects in a capital budget, "may come back to haunt the Governor and future legislators."

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