By the Journal of Commerce

The governor is proposing to spend $352 million of the projected $653 million windfall on programs and projects spread over the next three years, and to save $301 million to offset potential budget deficits in 2006 or later.

Of the $352 million to be spent, $113 million would be spent in the current state budget year, fiscal year 2005, $118 million would be in the FY 2006 budget, which the Legislature is now preparing, and $121 million would be in the FY 2007 budget.

Of the total $352 million to be spent over three years, most would go to local schools, the University of Alaska, and to local governments to help offset higher public employee retirement costs.

An estimated $44 million would be appropriated to bolster state employee retirement funds, $37 million would be to pay the state's share of costs fighting forest fires in Interior Alaska last summer, and $47 million would go to pay for higher fuel costs and other increases in state agencies.