Alaska general fund spending would grow more than 8.5% in fiscal 2011, under the budget proposal Gov. Sean Parnell delivered Monday.
Parnell's budget, his first since he took over this summer after predecessor Sarah Palin quit, would increase operating spending more than 5% to more than $4.4 billion, and raise general fund capital spending almost 80% to $309 million.
Because of projected oil prices in excess of $76 a barrel, Parnell still projects a $500 million surplus. Oil taxes are the state's primary revenue source.
Parnell said most of the operating budget growth is attributed to formula-driven programs such as statutory K-12 school funding mandates, public employee retirement liabilities and Medicaid formula increases.
He said he wants to increase the capital budget to generate jobs and improve the state's infrastructure.
"These capital dollars will fuel Alaska's economy and put Alaskans to work," Parnell said in a statement. "We've included $85.4 million in the capital budget to leverage over $700 million in federal and other funds. This means improvements in transportation — highways, both land and marine, and aviation — as well as water and sewer projects and other vital infrastructure upgrades. We are also going to fix what we've got by including $100 million for the first year of a five-year deferred maintenance plan."
After federal funds, state permanent fund dividends and other non-general funds are added, the budget proposal grows from a $4.7 billion general fund to a total of $10.5 billion.
