More cuts considered as Legislature makes tough choices
House and Senate negotiations to consolidate competing spending and cuts
Alaska legislators are considering budget cuts to agencies that may seem small compared to the estimated $3.5 billion deficit the state is facing amid slumping oil prices. But they could mean big changes for some state services and programs.
The Senate passed its budget bill, SB 256, Monday.
"The budget was delivered with more than 30 days left in the regular legislative session, which allows the legislature time to consider other elements of the Governor’s fiscal plan, including revenue measures," the Senate majority said Monday in a press release. "HB 256 will go back to the House for a vote of concurrence on changes made in the Senate. If the concurrence vote fails, a conference committee will be appointed to continue work on the FY 2017 budget."
Proposals include cutting pre-kindergarten and early childhood education programs; levying a $100-a-year fee to be on a waiting list for state-run assisted living homes; and forcing what Gov. Bill Walker's budget director has said would be deeper cuts to the Department of Fish and Game that could limit season openings. This is on top of statewide agency cuts approved by legislators last year.
Some lawmakers in the Republican-led majorities say the budgets reflect the difficult decisions that have to be made to tackle the deficit fueled by low oil prices. Some minority Democrats say the impact could be significant.
"I understand we have to cut waste. We don't have to cut the things that make a difference in people's lives," Rep. Les Gara, D-Anchorage, said Wednesday. He called the House budget proposal that advanced from committee a "pathway to a recession."
The House was working Thursday to finalize its version of the budget while the Senate was scheduled to take up its version Monday.
Differences between the two will be sorted out by negotiators from the two chambers.
For years, legislators have tussled over pre-kindergarten programs. Walker initially proposed scrapping funding for three early childhood programs but later recommended funding for them. His budget director, Pat Pitney, said the administration isn't convinced these are the most robust programs but argues for refining those to make them more effective. The House, in the version of its budget that moved from committee, did not include funding. A Senate committee has proposed funding two of the programs.
Rep. Dan Saddler, R-Eagle River, said the $100 annual wait list fee for the Pioneer Homes is modest and could be used by the homes to help pay for costs. More than 5,500 people are on waiting lists for the homes, a figure that includes people not ready to move in now but who may want to move in in the future, said Jessica Bogard, administrative operations manager for the Alaska Pioneer Homes Division.
People can apply for a place in a home when they turn 65 and remain on an "inactive" list until they're ready to move in and change their status to active, she said. The average age for residents of the homes is 86, she said. Deputy state health commissioner Jon Sherwood said the fee would need to provide for waivers for those who cannot afford it.
Alaska relies heavily on oil revenues but has seen those diminish drastically as oil prices have stayed low.
The session is far from over. And the total budget impact remains fluid. Work continues on bills intended to curb costs in Medicaid, the criminal justice system and the oil and gas tax credit program. The Senate plans to look at the teachers' pension program.
Legislative leaders chose to focus on the budget before deciding on any bills that would add new revenue, saying their constituents expected them to cut first.
Walker and others have proposed drawing money for state costs from the fund that currently provides the annual dividend most Alaskans receive, ideas that would change how the dividend is calculated. The governor also has asked legislators to consider an array of industry tax hikes as well as increases in taxes on tobacco, booze and motor fuel. He also has proposed reinstituting a personal income tax for the first time since 1980.
Senate President Kevin Meyer, R-Anchorage, said he has not heard a lot yet on the economic impacts that some of the increases would have and said raising taxes just because we need the money isn't a good way to go about things.
House Speaker Mike Chenault, R-Nikiski, couldn't say which, if any, of those might pass. But he said they will continue to be looked at and vetted. Cuts won't balance the budget, and the state's current available revenue won't do it either, he said.