Governor makes $262M supplemental budget request for firefighting costs, Medicaid

In this Aug. 13, 2019 file photo, Alaska Gov. Mike Dunleavy speaks at a news conference in Anchorage, Alaska. (AP Photo/Mark Thiessen, File)
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JUNEAU, Alaska (KTUU) - Gov. Mike Dunleavy has put forward a $262 million budget request for state funding needed for the ongoing fiscal year. The bulk of the funds would go toward firefighting costs and Medicaid.

$128 million for Medicaid is needed from state coffers because cuts made by the governor and the Legislature in 2019 were not permitted by federal authorities.

According to officials from the Office of Management and Budget, the state would be unable to reimburse providers beginning in late March or early April without the additional appropriation.

Lawmakers across the aisle are saying the $128 million for Medicaid should be fast tracked to avoid a lapse in payments.

$110.5 million would go toward paying the state’s portion needed to fight fires during Alaska’s devastating 2019 fire season. $16 million of that $110.5 million figure would go toward expected costs to fight fires through next spring.

The governor’s budget request also includes roughly $12 million for the Alaska Marine Highway System. $5 million would go toward getting ships currently in layup back on the water.

According to administration officials, there were more issues found than expected with Alaska’s ferries when the ships were taken in for repairs after summer sailings.

The Malaspina, which is sitting in long-term layup, would not be impacted by the additional revenue. Estimates are that it would take upwards of $40 million to repair the 57-year-old ship.

What happens to the Malaspina will be a topic of a newly-created working group to address the long-term future of the ferry system, officials say.

The governor’s request includes $7 million that would go toward running Alaska’s ferries next summer. Officials say increased fuel costs and service delays contributed to the need for additional funding.

There would be a few additional sailings next summer with the new revenue, officials say.

The governor’s supplemental budget request also includes shifting existing funds around to tackle the notorious Knik Goose Bay Rd.

$2 million would be taken from a wider project to fix the road surface of the first seven miles of KGB Rd. Officials say the plan is separate to a proposal to widen and renovate the road and is needed because of a high number of traffic fatalities.

The budget request also includes $1 million to Alaska’s Pioneer Homes after a rate rise was implemented last September. The additional funding is needed to “meet the mission of serving elders regardless of ability to pay.”

A higher number of applicants signing up to be Alaska State Troopers is also resulting in the need for more equipment. $3.5 million from highway capital funds would go toward buying 32 new vehicles and new radio and radar units.

The Dunleavy administration also announced that the Division of Motor Vehicles office on Benson Blvd. in Anchorage will need to move to property owned by the University of Alaska Anchorage.

The $500,000 move is due to higher costs to rent the office space and will be covered by fees received by the DMV.

The Alaska Legislature will now need to consider the governor’s request and whether it wants to pass any and all items listed in the budget.

Officials could not say whether the supplemental budget was the largest in the state's history only that it was larger than year's request. If passed as is, the $262 million appropriation would erase much of the $355 million in savings made by the governor and the Legislature in 2019.

Lawmakers passed a $250 million appropriation from the Constitutional Budget Reserve (CBR) in 2019 to cover unexpected costs through the fiscal year. It would take another three-quarter vote of both the House and Senate to cover spending beyond that $250-million figure.

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