Alaska Senate approves budget proposal, but support of House Democrats still needed

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JUNEAU, Alaska — State lawmakers looked to end the extended legislative session Monday amid a still-unsettled budget

The Senate voted Monday morning to accept a compromise budget plan, but the state government could be left with partial funding for the coming fiscal year if House Democrats don't sign on. They've shown no indication they plan to do so.

The House's Democratic-led minority has opposed cuts to education included in the budget plan as well as the rejection of negotiated pay raises for labor union contracts for next year, among other things. Democratic support is needed in the House to meet the threshold required to authorize a draw from the constitutional budget reserve to cover costs of state government.

House minority leader Chris Tuck, D-Anchorage, said talks broke down Monday morning.

The budget proposal, advanced by a conference committee late Saturday and accepted by the Senate, would use money previously set aside for schools to help cover this year's deficit. To fund schools for the coming fiscal year, the committee proposed a blend of general funds and $157 million from an in-state gas pipeline fund. That's the fund that Gov. Bill Walker otherwise would use for an alternate gas pipeline project that Republican leaders have tried to restrict. Senate President Kevin Meyer, R-Anchorage, said there would still be about $30 million left in the fund.

While the Senate proposed a $47.5 million cut in school funding for next year in its version of the budget, the conference committee settled on a $16.5 million cut. That would be on top of cutting $52 million in one-time funds between 2016 and 2017, a cut first proposed by Walker and part of a separate spending package.

Lawmakers in the GOP-led majority said the one-time funds were approved at a time when oil prices were much higher and the state was in a different situation.

The budget proposal calls for a constitutional budget reserve vote for this year and next. Under the proposal, if the three-fourths vote to access the fund fails and the amount available this year doesn't cover costs, the amount necessary would come from a fund used for student scholarships.

While the administration has said there would be money to operate into the fall, it is expected at some point that a draw from reserves would be needed to help fill what is projected to be a multibillion-dollar budget hole. Walker spokeswoman Grace Jang has said the governor expects the legislature to pass a fully funded budget.

The Senate voted to authorize the draw 15-5, with minority Democrats voting in opposition. Senate minority leader Berta Gardner, D-Anchorage, said while she appreciates the efforts made throughout the budget process, "I am, and I think many of us and many Alaskans, dismayed at what we have failed to do here, and that is fund our public schools, live up to our promises and do something for the thousands of Alaskan working poor who are waiting for health care coverage."

Gov. Bill Walker has indicated he would call a special session dealing with Medicaid expansion and reform if lawmakers do not address it before adjourning. Bills dealing with those topics remain in committee.

Meyer said in an interview that the Senate has done its job. "I feel very good about what the Senate has done," he said.

The dramatic fall in oil prices since legislators finished their work last April has exacerbated Alaska's budget deficit. The focus this session has been on cutting spending and reducing the size of state government before beginning in earnest any discussions about additional revenues. In line with that, lawmakers passed a bill putting on hold the state's obligation to reimburse a portion of school bond debt payments. They also voted to repeal scheduled 2.5-percent pay raises for certain state workers not covered by unions.

Supporters of efforts to cancel planned raises for union and non-union workers said it was an effort to save jobs; critics said the state should honor its commitments.

Failure to reach a budget agreement sent the session, scheduled to end April 19, into overtime.

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