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Except for Wrangell not receiving a dollar, Gov. Sean Parnell's proposed budget is what it should be in current financial times — conservative.
Ketchikan's fortune in recent years produced hospital, library, fire hall, port and shipyard dollars. Most of those projects are complete or well on the way to completion. That's good for the community and necessary in terms of infrastructure to encourage economic development and growth in coming years.
Ketchikan has a huge need in water and sewer replacement infrastructure; city officials are addressing that.
Gov. Parnell has done what he said he would and what Ketchikan and House District 36 might have expected. Sen. Bert Stedman of Sitka, who represents the district in the Senate, foretold it would be a tight capital budget. With his years as chair of the Senate Finance committee and state budget knowledge, Ketchikan should not be surprised by this turn of events.
Ketchikan has seen a gubernatorial budget cut when compared to past years, being allotted a smidgeon over $10 million of the $20.8 million being directed toward the district by Parnell. Last year, when Ketchikan was in District 33, Parnell proposed $21.2 million to the district, of which $16.2 million was designated toward Ketchikan projects. Wrangell was allotted $3 million then. Perhaps the Legislature, when it gets its opportunity at the capital budget, will locate some capital dollars for Wrangell.
Although, as Sen. Stedman points out, those and any additional dollars will be coming out of savings.
Alaska has $16 billion in savings, but it also has declining revenues. Oil, which is experiencing lower than normal prices, accounts for more than 85 percent of the state's revenue.
Parnell's proposed operating budget will require $1.1 billion from savings. That follows $1.9 billion from savings necessary to balance this year's budget.
Plus, Parnell has proposed cutting 150 state jobs, most of which are vacant. But, still, it's job loss. The proposed operating budget amounts to $13.4 billion.
Plus, the state owes $12 billion to the pension fund provided to state and school district employees. He proposes putting $3 billion toward reducing that number.
Headlines in recent years have heralded all of the financial woes of small towns, big cities, states and businesses that neglected to reduce spending despite declining revenue. It has placed them in deep holes that likely will take some decades to climb out of. Alaska should do all it can to prevent following them into such trouble.
A conservative approach is what Alaska needs to ensure that it won't become a financial catastrophe. Parnell has focused on maintaining Alaska's infrastructure with state funds as well as spreading around federal funds.
That means that Ketchikan's Pioneer Home, Regional Youth Facility and Public Health Center all likely are to receive maintenance dollars. The end of South Tongass Highway and Deermount Street are in the capital budget for paving and widening, respectively.
In unveiling the capital and operating budgets, Parnell made it clear that he willingly will work with the Legislature to make limited additions and adjustments. For example, while he has provided for a 0.6 percent increase in education funding, some legislators will want to discuss that and whether it is sufficient. Or some might think education has to hold the line, too.
The bottom line is that this is a time of less revenue than in past years. Less revenue necessitates reduced spending. To approach a budget without that in mind puts a government in jeopardy of imploding and providing service worse than what a reduced government would.
Spending more than comes in is unsustainable. Gov. Parnell recognizes that and has been responsible in establishing his budgets.