JUNEAU — Gov. Bill Walker told legislators Wednesday that he expects them to continue their work on the state operating budget in Juneau.
However, he said he would allow them to take up the two other items on his special session call — legislation dealing with Medicaid expansion and reform and sexual assault prevention programs in schools — in Anchorage, if they wanted. But he said he told them not to leave Juneau without a fully funded budget.
Walker called for a special session Monday night, when the Legislature adjourned from an extended regular session with a partially funded budget for the fiscal year starting July 1. The House fell short of the votes needed to authorize a draw from the constitutional budget reserve fund. Support was needed from members of the Democratic-led minority to meet the necessary threshold, but they opposed the budget’s cuts to education and its failure to honor negotiated pay increases in union contracts, among other things. Democrats also wanted expanded Medicaid.
As the impasse over the budget continued Wednesday, House Minority Leader Chris Tuck, D-Anchorage, told reporters his caucus does not want to give up its vote to authorize the reserve draw “until we have Medicaid expansion.”
The special session began Tuesday, when legislative leaders — who previously indicated a desire to have a break before any special session — floated the idea of a recess and reconvening later, possibly in Anchorage. Many legislative offices were packed up last week after the regular session was originally scheduled to end, and work on the aging Capitol is poised to begin.
Walker said there’s time for lawmakers to finish their work in the Capitol. If there’s not, he said he received written assurance from the Juneau delegation and mayor that accommodations would be made. Centennial Hall is one possible location to meet, he said.
In a letter to legislative leaders Wednesday, Walker said it would be a “disservice” to Alaskans if the Legislature left Juneau without passing a fully funded budget. “Doing so creates uncertainty in business negotiations for State agencies, hampers the State’s ability to attract new investment, and creates significant challenges for our administration in planning for fiscal year 2016,” he wrote.
Both the director of the Legislative Finance Division and Walker’s budget director raised concerns that the inability to tap the constitutional budget reserve could wind up hurting the state’s credit rating.
On Wednesday, the House and Senate Finance committees held their first hearings on Walker’s new budget plan. Senate Finance members, and particularly co-chairman Pete Kelly, were unflinching in their criticism of the plan, which adds to the compromise budget passed earlier this week. It would restore funding to the school funding formula for the coming year and honor negotiated pay increases in labor contracts. It also restores money to the state ferry system and includes Medicaid expansion, among other things.
Both budget plans represent reductions from the current year, according to Walker’s budget office. Kelly, R-Fairbanks, said the current debate comes down to those who want to spend more and those who want to spend less.
While many of the things Walker added are things Democrats supported, Walker told reporters it wasn’t about picking sides.
“It was really what we thought was the healthiest budget to have out there,” said Walker, who said he thought the compromise budget cut too deeply in some areas.
Senate President Kevin Meyer, R-Anchorage, said the Senate plans to wait for the House to send over a budget capable of garnering the three-quarter vote needed to tap the reserve fund. But that bill still would have to be agreeable to the Senate, he said.
Tuck said his caucus also wants the $32 million in one-time funds for schools that lawmakers approved last year. That funding, along with $20 million in one-time funds for 2017, was repealed in the recently passed capital budget. Walker first proposed that cut.
Walker said that if legislators passed a fully funded budget without Medicaid expansion that would be fine, since expansion still could be dealt with through separate legislation. Tuck said he doesn’t agree with that.
While members of the Republican-led majority have called Medicaid expansion a major policy call that deserves close study and have indicated plans to hire consultants, Rep. Les Gara, D-Anchorage, said that seems like a stalling tactic given the hearings that have already been held on the issue.