Houses passes supplemental budget as operating budget continues to move steadily

 The House Finance Committee debates amendments to the FY2021 operating budget. (02/26/2020)
The House Finance Committee debates amendments to the FY2021 operating budget. (02/26/2020) (KTUU)
Published: Feb. 26, 2020 at 5:59 PM AKST
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The Alaska House of Representatives passed a supplemental budget on Wednesday on a 35-2 vote that would see $299 million spent from the CBR for spending needed for the ongoing fiscal year.

Spending from the CBR requires a three-quarter majority vote from both the Senate and the House.

The supplemental budget erases much of the

by the governor and the Legislature.

Rep. Neal Foster, a Democrat from Nome, said

approved by the House contained no more spending than the governor’s request.

$128 million would go to Medicaid after the Legislature and governor made cuts that weren’t allowed by federal authorities. According to officials from the Dunleavy administration, there is a March 23 deadline to receive Medicaid funding to ensure service isn’t interrupted.

$110 million would be spent on Alaska’s 2019 fire season and to prepare for the 2020 fire season. The House also allocated $24 million that would go to ensuring 911 services continue to be available across Alaska.

The supplemental budget

requested by the governor through separate legislation to make a full 2019 Permanent Fund dividend for eligible Alaskans.

The budget for the next fiscal year continues to be debated after a year of fiscal turmoil.

Gov. Mike Dunleavy introduced a budget proposal in February of 2019 with

. Most of the governor’s budget cuts were ultimately rejected by the Legislature.

Two rounds of vetoes and a split special session followed amid heated debates over the size of the PFD.

The 2019 session also

to organize for over a month.

The 2020 legislative session has run much more smoothly, for now.

Rep. Lance Pruitt, R-Anchorage, the House minority leader, said conversations are ongoing between the Senate and House caucuses and the Finance Committee co-chairs. “Dialog is much better than last year,” he said.

In December of 2019, the governor proposed

with a full statutory PFD for the fiscal year starting in July. The budget would be funded by spending $1.5 billion of the roughly $2 billion left in the Constitutional Budget Reserve (CBR), the state’s one remaining savings account.

The governor said his proposal was the beginning of conversations with Alaskans over their fiscal priorities.

The proposal to spend down the CBR received a frosty reception from lawmakers across the aisle.

At the time of the governor’s announcement, Rep. Jennifer Johnston, R-Anchorage, spoke in opposition to drawing down the CBR to pay a dividend that would likely top $3,000 per eligible Alaskan.

“In the last year alone, we saw a record fire season and the largest earthquake since 1964,” Johnston said through a prepared statement. “It would be reckless to drain our primary savings account for the largest PFD in history.”

After years of cuts to state spending, Rep. Bryce Edgmon, I-Dillingham, told reporters that the governor’s proposal signaled that Alaska had reached a floor that the budget could be reduced.

The operating budget before the House Finance Committee currently does not draw down the CBR nor does it contain a PFD. The size of the 2020 PFD would likely be considered through other legislation.

that calculates the PFD are expected later in the legislative session.

The operating budget which is headed to the House floor doesn’t make major changes to the request made by the governor, but there are some additional spending items:

  • The University of Alaska would see an additional $10.5 million for higher staff salaries approved by the Board of Regents.
  • The Alaska Marine Highway System would see an additional $18 million to get ferries back on the water and for extra sailings.
  • An additional $5 million would be spent on preparing for the 2020 wildfire season.
  • $3.4 million would go to the Ocean Ranger program that was vetoed by the governor.
  • $1 million would go to public media after the governor vetoed $2.7 million in 2019. .
  • $400,000 would go to the Department of Corrections to aid in recruitment efforts.

Like the governor’s budget request, the House Finance Committee’s operating budget would see municipal governments receive 50% of the state’s obligation for school bond debt reimbursement.

The amendment process is continuing in House Finance before the operating budget is expected to be on the floor later this week or early next week.

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