Gov. Sarah Palin is being criticized by legislators for poor communications during the Legislature's regular session, when lawmakers were putting together the state capital budget. Palin announced $231 million in vetoes from the capital budget June 29, catching legislators by surprise.
“Her communications could have been better,” said Rep. Kevin Meyer, co-chair of the House Finance Committee. “If she had told us up front that she wanted a $450 million capital budget instead of a $550 million budget, we could have met it.”
“All she told us was that she wanted a smaller capital budget than last year, and we accomplished that. Our capital budget was 40 percent lower than last year's,” Meyer said.
Other legislators said that had Palin given them guidelines it would have saved time and disappointment among constituents.
Senate President Lyda Green, R-Wasilla, said she was caught off guard by the priorities and criteria.
“If you're going to have new rules, announce them the first day, not one month after we leave Juneau,” she said. “She needs to make it clear the sorts of things that aren't going to be funded.
The $231 million in cuts drew praise from some lawmakers who believed the budget originally reflected too much spending.
“The most consistent comment we've heard from voters is that there is too much state spending. The governor was elected with a huge approval rating, and I think this is what people have asked her to do. We'll be in a deficit in a couple of years and it's better to make the cuts now.”
Anchorage Democrat Les Gara, a House Finance Committee member who voted against the capital budget, also said Palin did the right thing. “The Republican leadership went on a spending spree and it was not responsible,” Gara said. “I want there to be a real public process that is open and transparent where people justify the projects they ask for in front of the microphone.”
The cuts affected more than 300 local projects, and reduced the budget to nearly $1.6 billion. Palin also signed the operating and mental health budgets, but there were no cuts from what lawmakers submitted.
The capital budget includes $416 million in state funds, down from the $546 million contained in the budget sent to Palin. It still tucks away $50 million into the Constitutional Budget Reserve, a state savings account.
Although the governor said her priorities were consistent and that she supports core state responsibilities, such as infrastructure, she vetoed $10 million for expansion of the Port of Anchorage, a regional facility serving 90 percent of the state population. She approved $10 million for environmental studies for an extension of the Alaska Railroad to Port Mackenzie.
Bill Sheffield, director of the Anchorage port, was surprised by the veto and said he is now concerned that the port's major expansion program will be able to keep on schedule. Large cranes for the port have to be ordered this winter and if the port cannot get the $10 million restored next session, the facility may not be ready for the cranes when they arrive, Sheffield said.
Palin also vetoed money for energy projects in the Southcentral-Interior railbelt, including the 50 megawatt Fire Island wind project and funds to restart the Healy Clean Coal Project, a 50 megawatt new-technology coal power plant at Healy that has been mothballed because of a commercial dispute between Golden Valley Electric Association of Fairbanks and the Alaska Industrial Development Authority, the state corporation which owns the plant.
However, governor let stand a $46.2 million appropriation to complete the Swan Lake-Tyee intertie project, a half-completed 57-mile transmission line that will bring surplus hydro power from Lake Tyee, near Wrangell and Petersburg, to Ketchikan, which needs more power.
Palin said at a June 29 news conference that the cuts should send a message to lawmakers for next year's budget considerations. “We need to live within our means,” Palin said. “Even though we have a surplus, that doesn't warrant a spending spree.”
The state should prioritize its projects, while not spending a finite potential surplus created by high oil prices, she said. Oil is responsible for 85 percent of state revenue, but oil production is declining and deficits are expected in the next two years.
Palin said her administration prioritized funding for education, transportation and public safety projects. Then, capital budget projects were judged against whether her administration thought other public entities, such as the federal or local government, should pay for them.
After that, Palin examined whether the project was already underway or is receiving partial matching funds from another source. “We had to look at wants versus needs, needs of course weighing much more heavily than wants,” Palin said. “This was a deliberative process, meant to provide consistency.”
Steve Quinn of the Associated Press contributed to this article.
29,324 (in millions) 
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