Volume 2 Issue 15

Session Wrap-Up Installment #4

Budget Vetoes Cut Deep

June 4, 2010

Yesterday, Governor Sean Parnell announced $335 million in cuts to the capital and operating budgets. While I expected a lot of line-item vetoes from the governor given the overall size of the budget, I’m disappointed by some of the choices he made.

Juneau fared pretty well – about 13.5% of our capital budget was cut, but most of that was reductions rather than complete vetoes. Other areas of the state didn’t fare as well, including much of Southeast Alaska and the Bush.

There are two vetoes that especially concern me. The first is the veto of a much-needed increase in Denali KidCare that would allow more children and pregnant women to receive medical care. The second is a $25 million reduction in renewable energy grants.

The next step in the budget process is for the Legislature to determine whether or not to attempt an override of some or all of the governor’s vetoes.

Thank you for reading my newsletter. I always enjoy hearing from you, so please stop by, call, write or email.

Senator Egan and I watch as AMHS M/V Taku crew (Captain Thomas Moore, Chief Mate Colin Vogler, Second Mate Kristina Mogel, Bosun Alan Emmert and Chief Purser Gina Such) receive the Governor’s Denali Peak Performance Award for Heroic Performance for rescuing two crewmembers from a fishing vessel engulfed in flames.

The final operating budget was $8.2 billion. The governor cut about $36 million of that, but most of it was money for bills that didn’t pass. The final operating budget includes the fiscal impact of bills that have passed or are still moving. Because the operating budget isn’t usually the last thing that we pass in session, there’s always some cleanup for the governor to do. He also vetoed the $330,000 fiscal note for SB 305, the bill decoupling oil and gas taxes, because he vetoed the bill. Most disappointing – he vetoed the $2.9 million fiscal note for SB 13 and announced that he will veto the bill, which would have raised the income limits for the Denali KidCare program.

The capital budget as passed by the Legislature was just over $3 billion. The governor vetoed about $300 million of that. It’s the largest veto amount I’ve ever seen, but then again it is also the largest capital budget I’ve ever seen. Of the $300 million, about $90 million was for Anchorage projects, $9.6 million was for Juneau projects and $25 million was for renewable energy grants. Areas particularly impacted by the cuts were Southeast Alaska and Rural Alaska – where every project means a great improvement in quality of life, public safety and/or employment.

If you would like to see the spreadsheets, visit the Office of Management and Budget’s website.

Juneau’s capital budget projects amounted to about $71 million dollars.

The governor cut the following projects completely:

·         Centennial Hall Emergency Relief Center improvements ($1.2 million) and

·         Southeast Alaska Solid Waste Authority start-up funding ($125,000).

The governor reduced the following projects:

·         Governor’s House deferred maintenance (from $1 million to $750,000);

·         Sewage system major repairs and expansion (from $3 million to $1.5 million);

·         New state office building planning and design (from $5 million to $2 million); and

·         Southeast Alaska Native Cultural & Visitor Center (from $4 million to $2 million).

The governor also vetoed $1.5 million in the capital budget for the Statewide Library, Archives and Museum (SLAM) facility, but the facility is still slated to receive $18.5 million if the General Obligation Bond package passes on the November ballot.

Celebrating the Alaska Historical Collection’s 110^th birthday with Kay Shelton, former director of the Division of Libraries, Archives and Museums.

One of the major legislative accomplishments this year was the passage of SB 13, which would increase the income eligibility levels for the Denali KidCare program from 175% of the federal poverty level to 200% of the federal poverty level. The bill had wide public support and was estimated to serve an additional 1,277 children and 218 pregnant women. This year, the cost to the state would have been $912,800, which would have brought a federal match of $2,007,600 (also vetoed).

The governor’s reasoning for the cut was that Denali KidCare can cover abortions. The Alaska Supreme Court has ruled that as long as the state covers birthing services, the state is also required to cover medically necessary abortions. What the governor has done is punish almost 1400 Alaskans, indeed he has jeopardized their health and welfare, to make a political statement.

This year the Legislature appropriated $50 million for round three of the Alaska Energy Authority’s Renewable Energy Grants. The governor vetoed half of that. That means that 46 renewable energy projects around the state will not happen this year and only 22 projects will move forward. When Juneau’s alternative energy power source was interrupted by an avalanche in 2008 and again in 2009, we got a taste of how expensive diesel power can be for many Alaskan communities. These projects could have helped these communities develop renewable energy sources so that all Alaskans can one day enjoy reasonable energy costs.

I’m particularly disappointed that one of the projects that won’t be funded this year because of the cut is the Gastineau Elementary School Geothermal Loopfield project.

The Legislature can override all or part of the governor’s budget vetoes with a three-quarters vote of both bodies (45 of 60 legislators). Because this is the second year of the two-year session, the Legislature must meet in a special session to address the vetoes and we can do that any time before the 27^th Legislature begins in January. The Legislature can call itself into a special session with the approval of two-thirds of the membership (40 legislators).

I’m not sure whether we can successfully override any of the vetoes, much less call ourselves into a special session, but I am hoping we do.

Remembering Two Great Alaskans

I got a chance to visit with Governor Wally Hickel during the AGIA hearings in 2008. He passed away on May 7. He was a great Alaskan and will be missed.

Last week, I traveled to Halibut Cove to celebrate the life of Alaskan artist Diana Tillion. It was wonderful to visit with her husband (and former legislative colleague of my father’s) Clem Tillion and their children. Diana passed away on February 3.