House-approved budget bill would create uncertainty when new fiscal year arrives

House Speaker Bryce Edgmon (right) and Senate President Pete Kelly (left) watch a joint floor session
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JUNEAU, Alaska (KTUU) - On Monday, the House of Representatives passed an operating budget bill, 22-17, with all members voting along caucus lines.

The vote on House Bill 57 marked the end of one chapter, in the heated debate over the appropriate level of government spending, at a time when the state is running at a projected $2.8 billion deficit.

However, the debate is far from over. While the spending plan itself passed, the House failed to reach the requisite three-quarter support on the so-called "effective date clause," which is needed to establish when a bill takes effect. Without the passage of that clause, the operating budget bill would only take effect 90 days after the governor signs the bill into law.

Because the fiscal year begins on July 1 and the governor is unlikely to sign the budget bill until late April at the soonest, the lack of an effective date clause could leave state government unable to pay its bills for weeks or months.

However, the effective date issue could be resolved in budget negotiations between the Democrat-led House majority and the Republican-controlled Senate, which are also the next big step toward establishing the level of spending in fiscal year 2018.

House leaders, in a bicameral conference committee that will convene at the end of session, are expected to fight to preserve most government services while the Senate leaders are expected to apply downward pressure on the level of spending.

Essentially, the House-approved plan represents the upper limit of what state government spending could be in the year ahead, and that's why the Democrat-led group's proposal represents a $75.4 million increase over the version of H.B. 57, introduced in December by Gov. Bill Walker. Largely, the increase goes back to the Democrat-led group's belief that Alaskans should receive $1,150 Permanent Fund dividends - $150 more than the governor suggested. The House majority also added cash to pay for various caucus priorities, such as pre-kindergarten programs.

While overall state government spending is down to $6.9 billion this year - a reduction of one-third compared to fiscal year 2013 - Senate Republicans have indicated a desire to slash spending by another $300 million this year. The Senate majority caucus has indicated it will target the education, health, and transportation departments, but it has not yet detailed how to reach the target reduction.

However, the chapter of the budget battle that just concluded in the House may serve as a preview of specific items likely to be put on the chopping block.

Members of the House minority tried to slash hundreds of budget lines - first in the finance committee, and then in five consecutive days of floor sessions: proposed cuts that would have slashed everything from K-12 schools to the Alaska Marine Highway System to the state's collection of dues for labor unions representing state government employees.



 
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