Alaska Senate committee's draft budget cuts $206 million from House plan but still has deficit

Yahoo

25-04-2025

The chairs of the Senate Finance Committee huddle for a discussion after introducing their draft operating budget, Thursday, April 24, 2025. (Photo by James Brooks/Alaska Beacon)
A powerful Alaska Senate committee is considering a draft of Alaska's state operating budget that would cut more than $200 million from a version adopted earlier this month by the state House.
The Senate Finance Committee unveiled the first draft of its operating budget proposal during a Thursday morning meeting in the Capitol at Juneau.
The biggest item on the committee's chopping block was a significant public school funding increase. The House voted for an $81 million bump in K-12 public school funding above what lawmakers and Gov. Mike Dunleavy approved last year.
That increase is gone in the Senate's budget, as is almost every other budget addition proposed by the House. Dunleavy proposed budget increases as well — for state troopers, health care and additional staff in various state departments — and almost all of those were eliminated, too.
'Those were eliminated from the budget, along with the request that the governor had for all other increments, because of our financial condition,' said Sen. Lyman Hoffman, D-Bethel and the member of the finance committee in charge of writing its draft budget for state services and programs.
Even with the Senate's cuts, preliminary figures show that the operating budget — when combined with other budget bills — still contains a deficit of between $70 million and $140 million.
That figure will almost certainly change, because some costs — particularly labor contracts — have not yet been determined.
'We are still in deficit mode. There is still work that needs to be done on this budget to have it balance,' Hoffman said.
The bipartisan majority in charge of the state Senate has vowed to write a balanced budget that does not require spending from savings.
The document revealed Thursday keeps to that pledge. Unlike the House version of the budget, there's no section unlocking the Constitutional Budget Reserve, the $2.8 billion fund that is the state's largest savings account.
The committee's proposal keeps a roughly $1,400 Permanent Fund dividend approved by the House; at $950 million, that is the third-largest item in the budget, behind education and health spending, respectively.
Among the committee's few additions are additions to the state's wildfire-response and disaster-response funds. These additions would bring the funds up to the amount needed to pay for average annual expenses over the past five years.
The committee's proposed elimination of House-adopted increases are much more significant.
Among them: Permanently closing part of Spring Creek prison to save $7.5 million per year, eliminating double-overtime pay for some prison guards to save $6 million per year, cutting teacher recruitment programs to save $1 million per year, reversing a funding increase for Parents as Teachers and the Dolly Parton Imagination Library, eliminating grants to child advocacy centers to save $5.5 million, and eliminating more than $13 million intended to improve access to child care.
Funding increases proposed by the House for senior services were eliminated, as was money for athletics programs and research facilities at the University of Alaska Anchorage and University of Alaska Fairbanks.
Hoffman noted that no action taken by the finance committee is final. The budget bill is subject to amendments in committee, debate on the Senate floor, and then any differences between the House and Senate may be negotiated in a conference committee whose task will be to find a compromise between the two drafts.
'There's a large difference between the House and Senate at this time. There's a lot of work left to do at the conference table,' he said.
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