Legislature passes compromise state operating budget

JUNEAU — The Alaska Legislature on Tuesday passed a compromise state operating budget that restored funding for public schools, reduced a proposed cut to the university system and aimed to prevent layoff warnings being sent to state workers.

The vote came after House and Senate negotiators reached a deal late Monday. Lawmakers also passed a separate, pared-down state infrastructure budget.

The compromise operating budget addressed a number of issues that were important to minority House Democrats. Support from the minority was needed in the House to access a reserve fund to help cover an estimated $3.3 billion hole for the coming fiscal year.

Legislative leaders wanted to avoid a repeat of last year, when a budget fight spilled into June and thousands of state workers received notices warning of possible layoffs if a budget wasn’t approved by July 1. The deadline for mailing those warnings was Wednesday afternoon, said deputy commissioner of Administration Leslie Ridle.

Asked if the governor would accept a budget funded with money from the constitutional budget reserve, Walker spokeswoman Grace Jang said he typically doesn’t comment on pending legislation until it reaches his desk.

House Speaker Mike Chenault, R-Nikiski, said lawmakers are sending Gov. Bill Walker a responsible budget and while Walker could veto it, Chenault said he doesn’t see him doing that.

Walker planned a news conference for Wednesday.

Even with a budget deal, legislative leaders acknowledged there was still work to do during the special session. The state faces a multibillion-dollar budget deficit amid low oil prices and the pieces of a long-range fiscal plan proposed by Walker to put the state, which has long relied on oil revenues, on a steadier path were pending. Legislative leaders committed to vetting the proposals but offered no guarantee about their chances of passing.

Lawmakers wanted to be able to clear the decks of the budget to focus on the revenue pieces.

Senate Finance Committee co-chair Anna MacKinnon, a Republican from Eagle River, said the operating budget represents a bipartisan effort and addresses “the need to cut, the need to invest and the need to compromise.”

Senate Finance Committee co-chair Pete Kelly, R-Fairbanks, said the cutting will continue next year, given the state’s fiscal situation. But legislators already have made serious dents in the budget through cuts and reform efforts, he said.

Rep. Lora Reinbold, R-Eagle River, was among those who voted against it, saying she didn’t believe lawmakers had cut enough this go-round.

Rep. Sam Kito III, D-Juneau, also opposed it, saying he was concerned about dipping too deeply into savings.

While some people talk about the state living within its means, it doesn’t have enough revenue to do so, Kito said.

The budget deal eases the level of a proposed cut to the University of Alaska system, provides funding for prekindergarten and early childhood education programs, reduces a cut to the state ferry system and allows for collected cruise ship passenger taxes to flow to certain communities where the ships stop. The budget conference committee that advanced the deal previously recommended not distributing the taxes during the coming fiscal year.

The compromise also restores K-12 funding to previously anticipated levels and adds a bit extra to that, according to Legislative Finance Division Director David Teal.

It also addresses funding for public broadcasting.

During the regular and extended session, disagreement over how much to change Alaska’s oil and gas tax credit structure proved to be a stumbling block, and legislators said they saw resolution on that issue as key to making further progress on the budget and on revenue bills.

That issue still wasn’t resolved, but lawmakers expected work on it to continue.

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