(SitNews) Ketchikan, Alaska - The Alaska House of Representatives early Friday morning passed a Fiscal Year 2016 statewide operating budget with a historic 10 percent reduction in unrestricted general funds. Faced with a $3.5 billion deficit, the Alaska House Finance Committee found $229 million in reductions to day-to-day agency operations, while prioritizing protecting the economy and core services. The nonpartisan Legislative Finance Division reports the 10 percent reduction as the largest in state history. The House also approved the FY2016 Mental Health budget.

“No one predicted the sharp drop in oil prices, nor the state losing more than 50 percent of expected revenue over the past few months. With that in mind, we had to adjust – prioritize needs versus wants and not shock the economy,” said House Finance Committee Co-Chair Mark Neuman, R-Su-Valley. “This budget reflects a careful look at what the core functions of government should be. The services Alaskans have come to expect will be preserved as best as we can, while this bill starts the discussion on what level of government services we can afford now and into the future.”

The House Finance Committee Substitute (CS) for the operating budget, House Bill 72, reduces the unrestricted general funds total agency operations budget by $376.9 million.

Budget totals are:

• $9.515 billion in all funds – a $3 billion reduction from the current year budget.
• $4.126 billion in unrestricted general funds for agency operations, including formulas like education and Medicaid.
• $2.054 billion in unrestricted general funds – the record 10 percent reduction in day-to-day agency operations.

“We took care of one of the ‘Big Three’ cost drivers last year – public employee retirement – and we’re dealing with the other two – education and health care – this year,” said Neuman. “More work lies ahead. We’ve already begun the discussions with the executive branch so we can work with state departments over the interim to wisely rethink the size, shape and functions of government. We must continue to examine every department and every program to ensure they are as effective and efficient as possible.”

Neuman and House Majority leadership directed Finance Subcommittees to focus on unrestricted general funds, because the difference between UGF revenue and expenditures equals Alaska’s fiscal gap. The Finance Committee added an extra day of public testimony, heard from 465 LIO testifiers, received 811 written comments, and adopted 33 amendments.

State statute requires that mental health funding be presented in a separate appropriation bill, making it easier to track what funds the state invests in that area. So what you see in HB 73 is the general fund/mental health (GF/MH) and Mental Health Trust Authority Authorized Receipts (MHTAAR) investments in mental health programs. All mental health spending is accounted for in the operating budget reports prepared by the Legislative Finance Division.

The Alaska Independent Democratic Coalition United in opposition to the Operating Budget citing the Lack of Medicaid expansion, elimination of Pre-K and cuts to public Education Funding as reasons for opposing the budget.

All 13 members voted no because they say the budget harms seniors and children while protecting corporate interests and unaffordable projects. The Republican budget includes the total elimination of pre-k programs and a significant $32 million cut in funding for K-12 public education. Overall, the budget deficit still remains $3.5 billion. The Alaska Independent Democratic Coalition proposed millions of dollars in spending cuts while supporting efforts to protect education, seniors and kids.

“We are in the midst of one of the most important budget discussions in Alaska’s history,” said Coalition Leader Rep. Chris Tuck (D-Anchorage). “Our Coalition members consistently tout the priorities of having a lasting commitment to public education, making our communities safer, ensuring access to affordable healthcare, and investing in the future.”

The Alaska Independent Democratic Coalition says the version of the operating budget approved Thursday night cut public education, eliminated the vital Parents as Teachers program, defunded pre-k programs and made a $25 million dollar cut to the University of Alaska system.

"Cutting the budget makes sense given the $3.5 billion deficit and we offered up millions of dollars in smart and strategic cuts,” said House Finance Committee member Rep. Les Gara (D-Anchorage). “However, eliminating pre-k and ensuring another year of teacher layoffs was something I could not vote for. We also should have taken action, at no additional cost, to stem the epidemic of child neglect and abuse."

Governor Bill Walker (I) and the 13 members of the Alaska Independent Democratic Coalition continue to support Medicaid expansion, which was stripped from the approved FY 2016 budget by the Republican controlled Majority in the House. Alaska Independent Democratic Coalition says by taking advantage of Medicaid expansion, 4,000 jobs would be created and the number of uninsured in Alaska could be cut in half.

“The decision by the Majority to reject this opportunity to expand Medicaid is an example of playing politics with people’s lives,” said House Finance Committee member Rep. Scott Kawasaki (D-Fairbanks). “It’s time for the opponents of Medicaid expansion to put forward another proposal that would immediately increase access to health care for the neediest of Alaskans, generate billions of dollars of increased economic activity and save the state money. They won’t, because they can’t.”

During the amendment process in the Finance Committee and on the House Floor, the Alaska Independent Democratic Coalition offered up millions in possible funding cuts including unneeded megaprojects and deferring hundreds of millions of dollars in tax credits the state is paying the oil industry.

“We are facing a fiscal situation that threatens our livelihoods and our futures,” said Rep. Tuck. “Republican leadership has been a failure. They have promoted unsustainable spending, while shifting the benefits of our resources to outside interests, resulting in insecurity and instability. We will continue to put the best interest of the people of Alaska first and look forward to a vigorous discussion about Alaska’s future in the coming weeks.”

The approved FY 2016 operating budget now moves to the Alaska Senate for consideration.

Edited by Mary Kauffman, SitNews

Source of News: 

Alaska House Majority
www.housemajority.org

Alaska Independent Democratic Coalition
www.akdemocrats.org

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Stories In The News
Ketchikan, Alaska

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