The Legislature is entering the final stretch of the 90-day session with the House preparing for its annual tradition of spending multiple days and late nights on the operating budget this week. With that, the new revenue forecast and other spending legislation on the move, there’s plenty of budget elements in play. Here’s what happened and what to look forward to this week.
Just 28 days to go.
The Department of Revenue is projecting the state will make an additional $256 million with a slightly higher price on oil than expected, according to the spring revenue forecast. It still leaves the state with a $2.3 billion budget deficit (which most everyone is expected to be filled with money from the earnings reserve of the Alaska Permanent Fund). It’s incremental good news about the budget, and was received in very different ways from
“With any luck, it brings down the deficit to a manageable level,” Senate President Pete Kelly told KTUU. “I think it kind of bolsters our position that tax isn’t needed.”
Rep. Les Gara, D-Anchorage, told KTOO the additional funding still doesn’t eliminate the need for a long-term budget plan with some form of new revenue.
“The budget gap is phenomenal and we will be out of savings within a year if this Legislature does not get its act together to put together a budget plan that requires, maybe, oil companies to chip in,” he told the outlet. “Oil companies that are now paying no production taxes whatsoever. Can we afford to do that when the state is rearranging the chairs on the Titanic?”
Fast-track supplemental passes Senate
The Senate on Friday approved House Bill 321, the pared-down fast-track supplemental budget. Most importantly, it includes funding to keep the Alaska Marine Highway System funded through the rest of the fiscal year and the state’s Medicaid program funded through through the end of the 121-day session. Without funding, both programs would have been expected to run out of money by mid April at the latest. Medicaid would have continued to operate but health care providers would have gone unpaid for the rest of the fiscal year (smaller providers warned they might have had to shut down).
After the House spent the better part of last week’s attention on House Joint Resolution 23 (the PFD-into-the-constitution resolution), the Senate is setting out with its own solution to the budget with a spending cap in Senate Bill 196. The bill would limit spending on state departments to $4.1 billion in the next fiscal year and would be adjusted for inflation after that. The legislation advanced from the Senate Finance Committee on Friday and is currently in the Senate Rules Committee.
Permanent Fund Corporation head Angela Rodell told the House Finance Committee last week that House Joint Resolution 23 didn’t really meet the criteria requested from the Permanent Fund Corporation to set in place clearer rules on the budget. On Thursday, the board returned with an official resolution warning the Legislature that unstructured draws to pay for state government would jeopardize the account because it would force managers to reconsider the ways they invest. Rules on the draw, the board explained, would help managers plan their investments better and maximize the return.
House operating budget
The House Finance Committee finally moved the operating budget out of committee on Friday afternoon. The budget increases undesignated general fund spending over the governor’s request by about $36.7 million, spending about $3.9 billion on agency operations (with a total UGF spend of $4.5 billion including debt service and retirement payments).
The biggest increase was seen in the University of Alaska’s budget, which was increased by $19.1 million.
The budget is set to be read across the floor today and taken up for the traditional marathon amendment session on Tuesday night. House minority Republicans offered dozens and dozens and dozens of amendments in the committee process over two weeks (the total count including majority amendments is 197), so expect the floor session to be a multi-night event.
The House will be considering two big and very different resolutions today.
House Concurrent Resolution 19 by Rep. Dan Ortiz would direct Gov. Bill Walker to declare an emergency for Alaska Native languages and promote programs that would help preserve the many languages that are on the brink. During the committee process, we saw Rep. Dan Saddler offer various amendments that would have broadened the intent of the bill to cover non-Native Languages or to promote non-Alaska Native people to also participate and learn the languages. Ortiz said those amendments missed the point of the resolution and watered it down.
House Concurrent Resolution 21 by Rep. David Guttenberg would send a message to the feds telling them to respect Alaska’s voter-approved recreational marijuana industry. The resolution has been relatively under the radar, but the Senate Majority’s actions on a similar effort by Rep. Berta Gardner have brought the issue to the forefront.
Senate Finance to hear Kawasaki bill
There’s been plenty of undercurrent talk about the legislation introduced by Senate President Pete Kelly this session, particularly when he introduced legislation that would extend the senior benefits program. That’s because it’s similar to legislation that was introduced last year by Rep. Scott Kawasaki, the Democrat who’s challenging Kelly for the Senate this fall.
Anyways, Kawasaki’s bill made it over to the Senate before Kelly’s made it through the committee process and is scheduled to be heard on Tuesday in the Senate Finance Committee. It has the co-sponsorship of a bunch of senators, including Kelly. If it clears the Senate, it’d be Kawasaki’s first sole prime sponsorship bill to be sent to the governor. (He has two other prime sponsorship bills in law, but both were co-prime sponsored with other representatives).
What we’re reading
- One of my favorite camaraderie-building events in the Alaska Legislature, the annual legislative shoot, happened over the weekend. Like with most things related to the Legislature, the hard-working James Brooks was there for the action. Read: Alaska lawmakers, staff and more muster for 21st annual Legislative Shoot via Juneau Empire.
- Two buildings in Fairbanks have collapsed under snow over the last week, including one of the oldest buildings in the area. On Saturday night, the 112-year-old Masonic Temple’s roof fell in and the city of Fairbanks made the quick decision to pull the entire building down. The building had been a fixture of the city, and was the site of a speech by President Warren G. Harding during his visit to the territory in 1923. History buffs are upset with the decision to tear the entire thing down. Read: Fairbanks mayor defends decision to demolish Masonic Temple via Fairbanks Daily News-Miner.