FAIRBANKS — A few local elected leaders are optimistic about the proposed budget Gov. Sean Parnell released Friday, saying it’s a good starting point that recognizes a tighter state pocketbook.
Parnell’s plan proposes more than a $1 billion reduction in spending throughout the state compared to last year, largely by cutting capital projects.
Notable proposed spending items include a $50 million grant for a system to get natural gas from the North Slope, $1 million for Fairbanks to host the 2014 Arctic Winter Games and $2.5 million for the Interior Alaska Veterans Cemetery.
The budget has about $95 million designated specifically for Fairbanks. Of that, $33 million would come from federal highway funds designated for road projects throughout the area.
Rep. Scott Kawasaki, D-Fairbanks, a member of the House Finance Committee, said the budget is a good first step.
“The budget is a good starting point that recognizes the need for accountability and a tighter budget situation,” he said, noting the Legislature still has a chance to weigh in. “The budget is the responsibility of the legislative branch, so I look forward to making changes.”
Local Republican members of the House and Senate finance committees had not returned requests to comment by press time.
Borough Mayor Luke Hopkins was positive about the governor’s proposed budget, saying he was pleased to see funding proposed for the Arctic Winter Games Host Society as well as sewer and water upgrades at Pioneer Park.
However, he said, he was disappointed at the lack of funding for much-needed upgrades at Ryan Middle School.
“We had asked the governor for consideration for Ryan Middle School, and I was hoping for a boost in the rankings,” he said. “Our community is already under a lot of financial stress and other communities get their schools fully funded. I was hoping for more assistance there.”
He said the $50 million grant for natural gas, matched with a sizable package of low-interest loans for infrastructure, will be a boon for the area.
“I’m really glad that our community has a jump on the energy project,” he said.
Parnell said his budget is based on current oil production forecasts and doesn’t account for the reduction in revenue that would be associated with slashing oil taxes, as he has proposed.
Kawasaki said the introduction of a big tax break package could dramatically change how the Legislature looks at the budget.
“One of the primary pieces of legislation that the governor said he will once again propose is tax breaks for big oil,” he said. “His own revenue department said that legislation will immediately put the budget in jeopardy and require us to take out of savings.
“I really don’t know how much appetite there will be to invest in the big energy projects that Fairbanks clearly needs,” Kawasaki said, “especially when we are in the red. I hope that we can come to resolution on the cost of energy and oil tax debate on separate ground.”
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