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House Finance Committee trying to finish work on Alaska budget as session nears scheduled end

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JUNEAU, Alaska — On the last scheduled day of the legislative session, state lawmakers were still trying to finish writing the capital budget on Sunday.

While the budget is typically one of the last major pieces of legislation in play, the House Finance Committee was waiting to put its final touches on it, pending an agreement on additional education funding.

Co-chairman Bill Stoltze, R-Chugiak, told the committee Sunday afternoon that when a bill rewrite came back before the panel, it would include an additional $10 million for the Susitna-Watana hydro-project, providing a total of $20 million for the dam project.

That's about half of what Gov. Sean Parnell requested for this year and next and $10 million more than the Senate included. Some lawmakers have questioned additional funding for the proposed south-central Alaska mega-project, given the state is also pursuing a major natural gas pipeline project.

The committee had not met again as of late Sunday night.

The draft bill released late Saturday night included Senate-proposed funding intended to complete the state library, archives and museum building in Juneau and an engineering building at the University of Alaska Anchorage. It also stuck with the Senate's proposed approach for a new $245 million power plant at the University of Alaska Fairbanks — a mix of state funds and $157.5 million in anticipated bond revenue.

Part of the bonding is expected to come through the Alaska Municipal Bond Bank Authority. A companion bill that would raise the borrowing limit of the authority passed the House unanimously Sunday.

The draft retained language that the University of Alaska implement a utility surcharge or raise tuition, but the total brought in annually cannot exceed $2 million. There was the expectation that the funding and fuel savings resulting from construction of a new plant would help offset university revenue bond debt service for the project.

It also reflected a proposed withdrawal of $3 billion from the constitutional budget reserve to address the state's pension obligation. It would need a three-fourths vote of each chamber.

Also included in the draft was $4.6 million for renovations at the Atwood state office building in Anchorage. The money would come from right-of-way lease rentals to the Department of Natural Resources and is meant to allow the agency to conform to new office space standards.

The draft included $25,000 to the governor's office for "providing information that may influence the outcome of an election on initiatives" scheduled to appear on this year's ballot. Gov. Sean Parnell's budget director, Karen Rehfeld, said the money was for agency costs for speaking or making presentations at forums on the ballot initiatives. But a Stoltze aide said the proposal was being removed for lack of support.

Lawmakers also were taking up agreement on the state operating budget. That budget funds the operations of state government, and the capital budget generally covers infrastructure and other costs.

The House and Senate each agreed to a $9.1 billion operating budget hammered out between House and Senate negotiators. That figure was lower than Parnell proposed and earned Rep. Alan Austerman, the House Finance Committee co-chairman who oversaw the budget, a standing ovation during a break on the floor. Austerman, R-Kodiak, who has long preached fiscal restraint, is retiring after this session. That figure did not include fiscal notes, special legislation or reappropriations, according to the Legislative Finance Division.

The agreement removes $1.4 million Parnell requested for an effort approved by lawmakers last year to allow the state to move toward taking over the lead role from the Army Corps of Engineers in the dredge-and-fill permitting program.

The conference committee also accepted about $620,000 in merit-pay increases for employees of the Alaska Gasline Development Corp., an organization that's been pursuing an in-state natural gas pipeline and is expected to play a key role in a major liquefied natural gas project the state is seeking. The House, in the version of the bill it passed last month, did not include those raises.

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