On the night of May 31, the Alaska State Legislature submitted a $4.3 billion fiscal year 2017 operating budget to Governor Bill Walker’s office, however, according to Walker, “this is long from over.”
The operating budget is seven percent lower than the FY2016 budget, even with Republican cut funding for early-learning programs, the university system and the base-student allocation returned to the budget. These programs did take a loss, but not as deep as previously thought.
With the submission of the budget to the Governor’s office, over 18,000 layoff notices were not sent out on June 1.
“We have been trying to push cuts to the roughly billion dollars in oil company subsidies. That has to get fixed that is bleeding the budget dry,” House Finance Committee member Les Gara said of the independent Democratic coalition. “We had a devastating cut to the university that our caucus opposed. We fixed that. We want a university people want to attend, not a university people want to say, ‘That’s not good for me. I’m leaving and taking my job to another state.’ We need people to want to live in the state, and a budget is something that helps people decide whether or not they’re going to have schools and a university and jobs in the state or they have to leave. We want them here.”
In a press conference on June 1, Walker expressed his concerns over the legislature’s reliance on savings rather than making cuts, stating that despite many meetings with the politicians, they still could not make the necessary moves to keep Alaska in a strong fiscal light.
“I hear a lot of discussion about how these are difficult decisions. Well, they may be politically difficult or challenging, but they’re fiscally responsible, and that’s why we were elected to come and make these decisions,” Walker said. “I’ve heard lots of discussion about, ‘let’s get through this next election, we’ll do it after the election.’ You know what, [it’s] time we stop talking about the upcoming election or the re-election, and start making decisions about what’s best for Alaska right now.”
The operating budget is a reduction of $500 million over FY 2016, but pulls $3.2 billion from the Constitutional Budget Reserve, which only contains $8 billion in emergency funds.
“There’s not enough money in the CBR to do it a second time,” Randall Hoffbeck, Department of Revenue Commissioner said at the June 1 press conference. “So, at best, we’re getting a one year reprieve from the decisions that have to be made.”
Walker has eight days to make a decision on the operating budget, but the legislature is not done with their jobs yet. Walker is hoping that the committees can determine how to make the FY2018 budget more fiscally sound with less reliance on the CBR.
“We can’t continue with business as usual — last year we did the exact same thing,” Walker said. “That’s not the answer.”
Daily costs of the special session from now on, according to the Legislative Affairs Agency will be roughly $26,475, totaling over $1,310,942 in overtime costs if the session continues to its June 22 deadline.