Gov. Sean Parnell’s proposed 2015 budget does not include any capital money for Wrangell projects.
The budget, released last Thursday, allots $2,360,655 for capital projects in the other constituent municipalities of what will become state House District 36 after a court-approved redistricting takes effect before mid-term elections this year, according to figures released on the Alaska Office of Management and Budget website. The Alaska legislature could revise the budget before it is enacted, though State Sen. Bert Stedman (R-Sitka) said the days when state capital funds can provide a wealth of economic stimulus may be numbered.
“Everything we add’s going to increase the deficit,” Stedman said. “The deficits are projected to continue in perpetuity.”
Stedman plans to meet with borough manager Jeff Jabusch in January to plot a potential way forward.
Stedman particularly cites changes to oil tax revenues enacted under Senate Bill 21 as a contributing factor to deficit creation. The bill changed taxation on oil and gas companies with the hope of spurring a growth in energy jobs in the state.
“The operative word is ‘hope,’” Stedman said.
“When we looked back at the last several years, the last few years, budgets have allowed us to build things like the boat haul-out and refurbish the Chief Shakes building,” he added. “What’s coming in front of us is like what’s coming behind us a decade ago, where the state’s going to be in a position to focus on basic maintenance and won’t have the ability to be proactive.”
SB 21 will likely be a focal point for criticism in the 2014 elections, Stedman said.
Of the state funds allotted, 93 percent — or more than $2.2 million — will go to deferred maintenance for the Ketchikan Pioneer Home, state OMB documents show. An additional $8.5 million in federal funds will be steered to two Ketchikan projects, the paving of the South Tongass Highway from Herring Cove to the end of the road and a road widening for Deermont Street in Ketchikan.
While the lack of state capital funds isn’t ideal, the capital budget represents only one part of the state’s local contribution, Jabusch said. The borough will also rely on funding for the Public Employee Retirement System (PERS) and other less tangible but still critical financial contributions.
“In the last four or five years, they (the state) have done a lot in Wrangell for state projects, so in that respect, we’re not completely devastated there,” he said.
Reconstruction of Evergreen Street to allow pedestrian traffic as far as Petroglyph Beach likely won’t be affected by the budget, since that project has been set aside with existing State Department of Transportation funds, though officials aren’t yet certain whether construction or planning will start during the 2014 construction season, Jabusch said.
On the school side, the state budget keeps school funding for the area flat on a per-pupil basis, said Superintendent Rich Rhodes. While that is good news, the school system may still face budget woes because of increasing costs – Rhodes mentioned energy and shipping as two examples – on the one hand and declining enrollment on the other.
“Those things continue to increase,” he said. “We still have to make reductions in order to balance the budget.”
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