State budget still under discussion

  • By Becky Bohrer
  • Sunday, April 12, 2015 10:11pm
  • News

JUNEAU, Alaska — Heading into the legislative session in January, two of the big issues were Gov. Bill Walker’s desire to expand Medicaid and the suddenly more urgent need to confront Alaska’s budget deficit amid a crash in oil prices.

It’s been said repeatedly this session that no one could have predicted the free-fall in oil prices that exacerbated Alaska’s deficit, leaving projected multibillion-dollar holes this year and next.

Alaska relies heavily on oil to fund state government, and oil prices are roughly half of what they were this time last year.

While it’s seen as virtually impossible for the state to cut its way out of this predicament, the focus in Juneau has been on cutting spending and reducing the size of state government before starting in earnest on discussions about additional revenues.

The state plans to use savings to help get by, but legislators and Walker want to stretch those reserves as long as possible.

One of the more contentious issues as House and Senate negotiators work to reach agreement on the state operating budget appears to be education funding.

The House agreed with Walker’s proposal to forward-fund education for 2017 at 90 percent, but the Senate did not forward fund for 2017 and proposed cutting $47.5 million in school funds for the next fiscal year, which starts July 1.

The would be on top of proposed cuts to the state education department and the possible elimination of one-time funds approved by lawmakers last session, of $52 million between next year and 2017, that Walker initially proposed.

The expectation has been that any authorized draw from the constitutional budget reserve would call for a three-quarter vote in both the House and Senate.

The majority caucuses on both sides require members to vote for the budget.

Fifteen of the Senate’s 20 members are in the majority, while the House would need to pick up help from the Democrats — who support Medicaid expansion and have opposed school funding cuts — to meet that threshold.

Walker, who took office Dec. 1, made expanding Medicaid a priority.

But that got off to a rocky start when he initially refused legislators’ calls to lay out his plan in bill form rather than have expansion-related provisions sprinkled throughout the operating budget.

He introduced an expansion bill last month that included proposals aimed at helping to contain and reduce costs in the existing Medicaid program. The current program is widely seen as unsustainable.

Supporters say expansion can provide savings for the state and leverage federal resources to help finance reform efforts.

But some legislators say they still have concerns about whether the system can handle thousands of new enrollees, and some want to enact reforms and see how they work before considering expansion.

Some question whether the federal government will honor its commitment to cover no less than 90 percent of health care costs for the newly eligible population.

The administration has said the state would not participate if the federal match fell below that threshold.

Walker’s appointees to boards and commissions, along with new Cabinet-level department heads are scheduled to be considered for confirmation by a joint session of the Legislature on Friday.

Those that have gotten particular attention include Rick Halford and Joe Paskvan, former legislators whom Walker appointed to the Alaska Gasline Development Corp. board after a shake-up that rankled Republican legislative leaders, and Attorney General Craig Richards, Walker’s former law partner.

Last session, the Legislature approved the state’s participation in a major liquefied natural gas project with oil and gas companies, TransCanada Corp. and the Alaska Gasline Development Corp.

But the project figured prominently into this session after a February op-ed in which Walker proposed an alternate project should the current project, known as Alaska LNG, falter.

The wording of the op-ed raised concerns that Walker was proposing a competing project and prompted House leaders to introduce a bill — which has passed the Legislature — that would restrict work on any alternate project until it is clearer whether Alaska LNG will enter its next phase.

While Walker has threatened a veto, he and House Speaker Mike Chenault have had conversations about whether there’s a way forward that gives both sides a level of comfort.

Walker has until Saturday to decide on a veto.

While the constitution allows for the Legislature to meet for up to 121 days in regular session, voters approved a 90-day session and a number of legislators would prefer to stick to that.

A special session to complete unfinished business could be called.

More in News

Kenai Fire Marshal Jeremy Hamilton is seen by one of Kenai Fire Department’s Tower trucks on Friday, Sept. 30, 2022 at Kenai Fire Department in Kenai, Alaska. (Jake Dye/Peninsula Clarion)
‘Get up, get out and get safe’

Kids taught about fire safety as part of prevention effort

Bob Bird, left, chairman of the Alaskan Independence Party, and former Lt. Gov. Loren Leman make the case in favor of a state constitutional convention during a debate in Anchorage broadcast Thursday by Alaska Public Media. (Screenshot from Alaska Public Media’s YouTube channel)
Constitutional convention debate gets heated

Abortion, PFD factor into forum.

Carol Freas (right) helps a voter fill out absentee election materials in Kenai City Hall ahead of the Oct. 4 municipal election on Thursday, Sept. 29, 2022 in Kenai, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
Absentee voting already underway

Absentee in-person voting has been made available across the borough

Graphic by Ashlyn O’Hara
Graphic by Ashlyn O’Hara
What’s on the ballot: Reapportionment, new field house, school bond

Voters will decide on ballot measures that address schools, public safety and legislative bodies

Cars line up ahead of dismissal at Mountain View Elementary School on Thursday, September 29, 2022, in Kenai, Alaska. A bond package up for consideration by Kenai Peninsula Borough voters on Oct. 4 would fund improvements to the school’s traffic flow. (Ashlyn O’Hara/Peninsula Clarion)
‘Critical needs’: Parking lot problems

Lack of space for pickup and drop-offs creates traffic jam at elementary school

Soldotna Elementary School Principal Dr. Austin Stevenson points out elements of the school building on Friday, Sept. 30, 2022, in Soldotna, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
‘Critical needs’: Aging school on the brink

Renovations are cost prohibitive at Soldotna Elementary

Rep. Mary Peltola, an Alaska Democrat, delivers a speech on the U.S. House floor before Thursday’s vote approving her first bill, establishing an Office of Food Security in the Department of Veterans Affairs. It passed the House by a 376-49 vote, although its fate in the Senate is undetermined. (Screenshot from official U.S. House video)
Poll: Peltola’s a popular pol

Food for vets bill passes House, pollster says she is “the most popular figure in Alaska right now.”

A parking sign awaits the new executive director of the Alaska Permanent Fund at its Juneau headquarters, Three finalists will be interviewed for the job during a public meeting Monday by the fund’s board of trustees, who are expected to deliberate and announce the new director immediately afterward. (Mark Sabbatini / Juneau Empire)
Interviews, selection of new Permanent Fund CEO set for Monday

Three finalists seeking to manage $73.7B fund to appear before trustees at public meeting in Juneau

Principal Sarge Truesdell looks at cracked siding outside of Soldotna High School on Tuesday, Sept. 27, 2022, in Soldotna, Alaska. The siding is one of several projects in a bond package Kenai Peninsula voters will consider during the Oct. 4 municipal election. (Ashlyn O’Hara/Peninsula Clarion)
‘Critical needs’: Split siding at SoHi

The damage has been given patchwork treatment over the years

Most Read