JUNEAU — Alaska is rolling in money from the high oil prices, with the revenue department on Wednesday projecting a state surplus of $3.4 billion.
The news comes as the Legislature prepares to decide how much it wants to spend on construction and maintenance projects in the coming year. Lawmakers had already planned a big budget, but this could inspire even more projects.
Legislators also are talking about putting more than $1 billion into savings in the coming year. The question will be how they divide the new projected $3.4 billion surplus between spending and savings.
Other states are reeling from the recession and cutting programs. But Alaska, which gets almost 90 percent of its state general fund revenue from oil, is raking in the cash from the same high oil prices that hurt consumers at the gasoline pump.
Alaska already has more than $11 billion in savings accounts.
Gov. Sean Parnell said he wants lawmakers to spend no more on construction projects than they did last year and to add most of the projected surplus to savings. The governor, who has the power to veto projects, said he's going to want even less spending than that if the Legislature doesn't pass his bill to slash state oil taxes.
"Really, how much (money) is enough?" Parnell said.
Sen. Bert Stedman bristled at the threat. He said the Senate won't cut the oil tax this year and the governor can abuse his power by vetoing projects in revenge if he wants. "We're not buying votes with the capital budget," Stedman said.
Parnell said there has to be less spending if the tax cut doesn't pass, because lawmakers will be relegating the state to a future of less oil production. Senators said that makes no sense and passing Parnell's bill would cost the state an estimated $8 billion in lost tax revenue over the next five years, with no guarantee of more drilling.
To read the complete article, visit www.adn.com.