The Alaska Legislature passes compromise operating budget

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ANCHORAGE (KTUU) - The Alaska Legislature has passed a compromise operating budget, likely averting a state government shutdown.

The Alaska Senate unanimously passed the budget Monday morning on the 147th day of the legislative session, just four days before the end of the ongoing special session.

The budget contains around $190 million in reductions from last year’s budget, said to be the largest drop in year-on-year spending in Alaska’s history. A tough-on-crime bill that passed through the Legislature in late May is estimated to cost over $40 million, eating up much of the budget’s savings.

Sen. Bert Stedman, R-Sitka, the co-chair of the Senate Finance Committee, urged passage of the compromise budget, saying work would continue next year to reduce spending.

The Legislature’s version of the budget rejected most of the proposals made by the governor in February.

Some big reductions were made to some major spending areas. The Legislature approved a roughly $45 million cut to the Alaska Marine Highway System, a $78 million cut was made to Medicaid while $5 million was taken from the University of Alaska.

Lawmakers voted to fully fund school bond debt, costing the state over $100 million in the next fiscal year.

A $10.5 billion transfer was also approved from the Earnings Reserve Account (ERA) to the Permanent Fund corpus, the constitutionally protected account of the Permanent Fund that can only be spent by a vote of the people.

Stedman said Saturday afternoon that it was a decision that all “legislators should be proud of and take credit for.”

The budget does not contain an appropriation for the Permanent Fund dividend, instead, the Legislature decided to debate the PFD through a separate bill.

Sen. Lora Reinbold, R-Eagle River, spoke on the Senate floor Monday morning against the decision to remove the PFD from the budget saying the decision was disappointing.

The governor’s office released a statement over the weekend applauding work done by a special committee to finalize a budget and likely avert a state government shutdown.

“The Senate and the House both need to follow the law in place for the past 37 years,” read the governor’s statement. “I am thankful for the progress so far, but the Legislature’s job is not done until they follow the law and approve a full PFD.”

On Sunday,the Alaska House of Representatives met and passed the budget along caucus lines with Rep. Gabriellie LeDoux, R-Anchorage, who sits with no caucus, voting against the budget’s passage.

The governor has 15 days, excluding Sundays, to either veto the budget or use his line-item veto power to reduce spending. The Legislature then needs a three-quarter vote of members to override any of the governor's vetoes.

The budget has to be signed by the governor before July 1 or the state government will shut down.

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