SitNews - Stories in the News - Ketchikan, Alaska

Alaska Legislature Passes Budget; Avoids possible shutdown


June 12, 2015
Friday PM

(SitNews) Anchorage, Alaska - Governor Bill Walker (I) praised the Alaska Legislature Thursday for passing a fully funded FY 2016 budget, and for passing the Alaska Safe Children’s Act. The move comes after months of negotiations between both legislative bodies, and now ends the possibility of a government shutdown, while holding the line on $800 million of spending reductions.

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“I commend the legislature for coming together to make an agreement on the budget,” said Governor Walker. “The state employs over 15,000 hard working men and women, and provides essential services to each and every Alaskan. Now that a budget has been passed, we can all get back to work and not worry about the harmful impacts of a potential government shutdown.”

Passed Thursday afternoon by both the House and Senate, HB 2001 provides funding to the state operating budget for the coming year. Governor Walker said he was pleased with the compromises that were made in the bill, and that this would allow lawmakers to focus more on the state’s larger fiscal challenges in the year ahead.

“Alaska is facing a $3.5 billion budget deficit, and I’m ready to roll up my sleeves and get to work on that,” said Governor Walker. “We need all hands on deck to fill that gap. Now that the budget negotiations are out of the way, I look forward to working with the legislature to continue this important conversation.”

Also passed Thursday was the Alaska Safe Children’s Act, HB 44, which provides child sexual assault and teen dating violence prevention curriculum to elementary and high schools. A combination of Erin’s Law and Bree’s law, the bill works to arm Alaska’s children with the knowledge to speak up when they are the victims of abuse.

“I am pleased that the legislature set aside their political differences to pass this important piece of legislation,” said Governor Walker. “Thousands of Alaskans are rejoicing this evening for the future safety of our children.”

“We do not support the substantial cuts delivered this session to education and services for Alaska’s sick, elderly, and defenseless. However, we recognize the difficult financial situation Alaska finds itself in today, and we could not continue to watch the House and Senate Majorities place innocent Alaskans at risk over their pursuit of a partisan political agenda,” stated Senator Berta Gardner (D-Anchorage).

Seven weeks past the end of the 2015 session, Senate Democrats voted in support of a Constitutional Budget Reserve draw that safeguards the Permanent Fund Dividend and prevents Alaska from entering an economic free-fall caused by a potential government shutdown.

In recognition of the fiscal crisis, at multiple times in the budget process over the last 143 days, Senate Democrats offered additional budget cuts of roughly $750 million. These amendments were voted down with few exceptions along caucus lines.

“This is not a perfect budget, but it prevents a PFD raid and keeps a promise to our hard-working public servants: the janitors, public safety officers, and thousands of other Alaskans who keep our neighborhoods safe and our state running,” said Senator Bill Wielechowski (D-Anchorage).

United with the House Independent Democratic Coalition, Senate Democrats maintained their support for public education, services for Alaska’s seniors and those in need, essential transportation networks, and the honoring of negotiated and agreed upon labor contracts despite the over 50 day long threat of a government shutdown from House and Senate Republicans.

“I am pleased this compromise keeps our promises to our dedicated public employees and does not entirely disable the Alaska Marine Highway System, which keeps coastal Alaska connected,” stated Senator Dennis Egan (D-Juneau).

“The negotiating process was difficult but absolutely necessary to reach consensus on a budget that eliminates the specter of a government shutdown,” said Alaska Independent Democratic Coalition Leader Rep. Chris Tuck (D-Anchorage). “By standing united behind our priorities, our Coalition was able to protect public education and seniors, restore pre-kindergarten funding, and ensure we have a healthy economy.”

The top priority of the Alaska Independent Democratic Coalition was to protect the state’s public education system, and the negotiated budget compromise reflects that priority. The approved budget includes the addition of $16.5 million to the Base Student Allocation, which was previously cut from the proposed budget. The compromise also added back $5 million for the University of Alaska and reinstated funding for pre-kindergarten to increase academic opportunities.

“We tried to achieve budget savings but just could not garner enough support,” said House Finance Committee member Rep. Scott Kawasaki (D-Fairbanks). “We proposed curtailing the spending of $600 million more in oil company tax credits than the law requires. We also tried to achieve $300 million in savings by taking advantage of Medicaid expansion and reform. We protected children and seniors, but ultimately, most of our major cuts were rejected by Republican leadership.”

The negotiated budget compromise also protects vital state services by restoring $2.8 million in cuts from the Senior Benefits Program, which helps low income seniors. The compromise also honors agreed to wage increases for thousands of state workers while still allowing flexibility for the state to renegotiate contracts in times of high or low oil prices.

“I am so proud of the members of our Coalition. We stood together and united around issues important to Alaskans,” said Rep. Tuck. “We faced enormous pressure to sacrifice our priorities this session. We did not buckle under that pressure. We expect a more productive working relationship with the Majority in the interim and next session.”

“The Senate stepped up to the plate this year to tackle the task of reigning in government spending, while preserving vital public services,” said Alaska Senate President Kevin Meyer (R-Anchorage). “I couldn’t be more proud of the members I had the opportunity to work with this year. We didn’t accomplish everything that needs to be done, but we found substantial savings and began the conversation of how to address Alaska’s fiscal crisis.”

According to the Alaska Senate Majority, a combination of low oil prices and government spending meant Alaska was facing a $4 billion budget shortfall this year. In response, the Legislature passed historically low budgets, reducing spending by $800 million or $1,086 for every Alaskan.

“Government has had a good run, but circumstances have changed,” said Senator Pete Kelly (R-Fairbanks). “Alaska’s budget shortfall is a challenge, but it also represents an opportunity to reduce a government that has grown well beyond its means. It took a long time to come to this conclusion because this fight over the budget was a fight worth having. Government must shrink, and that is not easy, but it must be done.”

In a good faith effort to avoid a government shutdown, the Senate agreed to fund a one-time cost of living wage increase for public employees. An understanding was reached between all interested parties that there would be no public employee raises for the next three fiscal years. If oil prices rise above $95 bbl or below $45 bbl for 60 consecutive days, however, contract negotiations may be reopened.

“The fiscal future of our state is being discussed in homes and businesses,” said Senate President Meyer. “Alaska’s fiscal reality will require us to reduce government spending. We took a great first step here, but more will be required of Alaska leaders and Alaskans to fully address our budget challenge.”

Americans for Prosperity Alaska in a prepared statement said, "After long discussions, it is exciting to see the state legislators stand with Alaska taxpayers. Our state chapter has been pushing for a responsible budget that cuts spending from the previous year, while also stopping funds from going to Medicaid expansion. Alaska needs to right-size its government before considering any new revenue sources, and it is great to see the legislature in agreement. While it's troubling a vocal minority will stop at nothing to ensure state workers receive raises during billion dollar budget shortfalls, it is comforting to know Gov. Walker cannot expand Medicaid under Obamacare with this agreement.”

The House and Senate Conference Committee on House Bill 2001 met Wednesday and approved and passed out a compromise budget for fiscal year 2016 using funds from the Constitutional Budget Reserve.

A deal reached between all sides included a $16.5 million to the Base Student Allocation, $700,000 for the Parents as Teachers program, $2 million for pre-kindergarten, $2.5 million for front line social workers, $2.8 million for the senior benefits program, $2 million for the Alaska Marine Highway System, $5 million for the University of Alaska statewide services, and fully funds employee wage increases for covered and non-covered employees. An executive branch-wide unallocated reduction of $29.8 million is also included to offset the cost of employee wage increases.

“This is a compromise that offers real solutions to the present impasse,” House Finance Co-chair Mark Neuman, R-Su-Valley, said Wednesday. “It increases funding for education, honors agreements with state workers, and funds other important programs, yet still allows us to reduce government spending significantly. Neither side gets everything they want, but that’s the essence of compromise.”

“We’re keeping Alaskans employed with this budget and that’s what matters the most,” House Finance Co-chair Steve Thompson, R-Fairbanks, said Wednesday. “Would we have liked to see a smaller budget? Yes. A budget where nobody is 100-percent happy, is a true compromise and that’s what we’re seeing with HB 2001.”

The conference committee report was adopted by both bodies Thursday and awaits to be signed into law by the Governor. House Bill 2001 was approved Thursday by a vote of 14 to 5 in the Senate and 32 to 7 in the House.

The Alaska House of Representatives adjourned Thursday afternoon sine die the second special session of the 29th Legislature. The House adjourned following concurrence in Senate changes to House Bill 44, the Alaska Safe Children’s Act, and after accepting the conference committee report on the FY16 statewide operating budget, HB 2001.

“Thank you to House members for their patience and willingness to reach a compromise budget that reflects our commitment to cut state spending in a responsible and respectful way,” said Alaska Speaker of the House Mike Chenault, R-Nikiski. “Our work won’t end with the gavel falling. I look forward to a short break, and then welcoming my colleagues to the Kenai next week to talk gasline progress.”

The House compromise budget agreed to by the Senate includes unallocated reductions to offset the cost of living increases for covered and non-covered state employees, reduces overall government spending by nearly $800 million in unrestricted general funds, and allows for a fully funded budget utilizing the Constitutional Budget Reserve Fund, or CBR.

“There are no easy solutions to the budget challenges facing Alaska,” said Alaska House Rules Chairman Craig Johnson, R-Anchorage. “But by working together, reaching across the aisle, and negotiating in good faith, we have taken an important first step. This compromise budget significantly reduces state spending – while also protecting jobs and Alaska’s economy.”

“This is the day that we have looked forward to, end of session. And, the work we accomplished in the special sessions is a testament to our true bipartisan approach as a caucus, including the voices and ideas of all sides in our policy discussions. For that we can all be proud,” said Alaska House Majority Whip Bob Herron, D-Bethel. “No bill or budget will satisfy all parties involved, but Alaskans can look to their legislature with the knowledge that we listened, adjusted and worked hard for them.”

The Second Regular Session of the 29th Alaska Legislature is scheduled to convene Jan. 19. 2016 at the Capitol in Juneau.


Edited by Mary Kauffman, SitNews


Sources of News:

Office of Gov. Bill Walker

House and Senate Conference Committee

Alaska Independent Democratic Coalition

Americans for Prosperity (AFP) Alaska

Senate Democrats

Alaska Senate Majority


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