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Governor Parnell Approves Budget Priorities

Press Release

Location: Anchorage, AK

Governor Sean Parnell today signed into law three budget bills for Fiscal Year 2013. The governor also signed into law a $453.5 million general obligation bond package for statewide transportation projects that will go to the voters in November.

The budget bills passed by the Legislature maintain the spending limit set by Governor Parnell and focused on the administration's key priorities of education, public safety, military support, transportation and infrastructure, and resource and economic development.

"Maintaining spending discipline, focusing on our constitutional priorities, investing in infrastructure to build economic opportunity, and saving for the future are vital components of the budget approved for the upcoming fiscal year," Governor Parnell said. "I appreciate the detailed legislative work on the budget and legislators' willingness to join me in limiting spending."

Governor Parnell exercised his constitutional line-item veto authority to reduce spending. The governor vetoed a total of $66.6 million, largely from operating items.

The operating and capital budgets now total $12.1 billion, including $7.9 billion in state general funds. Total state operating budget growth has been limited to 3.3 percent. The budget includes full funding for K-12 education, Medicaid, retirement system unfunded liability, debt service, and employee contracts. The capital budget totals $2.9 billion, including $1.9 billion in state general funds.

Boosts Savings

Two billion dollars of surplus funds were moved to savings with the potential of up to $3.4 billion going into the Statutory Budget Reserve based on projected FY 2012 and FY 2013 balances.

"Maintaining strong cash reserves and budget discipline are critical components of our long-range fiscal plan," Governor Parnell said. "Given the steady decline in oil production and the volatile nature of oil prices, we will need cash on hand to provide state services in the future."

Resource Development and Transportation Infrastructure

The capital budget will fund many important transportation and infrastructure projects across the state.

More than $1.6 billion was appropriated for highways, aviation, the Alaska Marine Highway, harbors, village safe water, and municipal water and sewer projects. The Roads to Resources initiative was also funded allowing work to continue on a road to Tanana, the Ambler District Road, a road to Umiat, and improvements on the Klondike Industrial Use Highway to Skagway.

Another $50 million was set aside in the Vessel Replacement Fund as a down payment on the second new ferry for the Alaska Marine Highway System.


Direct K-12 education funding increased $50 million in the signed budgets. The total state funded K-12 education and pupil transportation budget for FY 2013 is $1.2 billion. New legislation increased pupil transportation funding and resources to expand vocational education funding from grades 7 through 12. In addition, the state directly funds more than $329 million for school district retirement system unfunded liability for the Public Employees' and Teachers' Retirement Systems. The capital budget also includes over $431 million for school and university projects statewide.

Public Safety

Nearly $12 million in additional resources to combat domestic violence and sexual assault are included in the operating budget for prevention and intervention, support for survivors, and law enforcement. This funding includes 15 new Village Public Safety Officers the governor requested and additional Trooper support. More than $115 million is included in the capital budget for first responders, public safety, fire and rescue, emergency response and disaster preparedness projects across the state.


The capital budget contains over $247 million for statewide energy projects including: $31.5 million for weatherization programs to help Alaskans make their homes more energy efficient; $25.9 million for the Renewable Energy Fund targeting projects in areas with the highest energy costs; and $20 million for home energy rebates. The operating budget contains $38.2 million to fully fund the Power Cost Equalization Program, and an estimated $48 million for the Alaska Low-Income Energy Assistance Program. In addition, $125 million was appropriated for the new Sustainable Energy Fund to help finance energy infrastructure projects that will reduce the cost of energy to Alaskans.

Detailed information on capital projects across the state is available at:

Copies of the budgets and related documents are available at:

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