Latest news with #ConstitutionalBudgetReserve
Yahoo
20-05-2025
- Business
- Yahoo
Alaska Senate approves austere operating budget with $1,000 PFD ahead of House vote
May 20—JUNEAU — The Alaska Senate on Tuesday approved an austere operating budget for the next fiscal year with a $1,000 Permanent Fund dividend. Lawmakers this year have grappled with a substantial deficit and a dire fiscal outlook due largely to diminished oil revenue. When adjusted for inflation, the dividend figure set to be approved by the Legislature this year is the lowest since the program began in 1982. The House is preparing to vote later in the day on the same budget bill. Legislative leaders said that Tuesday would be the final day of the legislative session, one day before the constitutional deadline for the session to end. The Senate passed the budget after minimal debate on a 17-3 vote. All 14 members of the bipartisan majority supported the budget. Three members of the Senate Republican minority caucus voted yes — Sens. Mike Cronk, James Kaufman and Rob Yundt — and three minority members voted no: Sens. Mike Shower, Robert Myers and Shelley Hughes. Bethel Democratic Sen. Lyman Hoffman, who manages the operating budget in the Senate, said the spending plan for the fiscal year that starts July 1 has a roughly $57 million surplus. But lawmakers have warned that surplus could quickly disappear if oil prices stay below projections. Additionally, legislators have said the state's fiscal outlook will likely be even more dire next year. The Legislature's budget would make cuts across state agencies. The Alaska Department of Corrections is set to see several reductions, including a $7.5 million cut with the intention of closing a housing unit at Spring Creek Correctional Center. Additional cuts were approved for the University of Alaska, the Alaska Psychiatric Institute and the Alaska Gasline Development Corp. The House passed its draft budget in April with limited spending cuts, a $1,400 dividend and a roughly $250 million deficit. The Senate's draft spending plan was balanced with deeper spending reductions proposed and a $1,000 dividend. The lower PFD figure freed up roughly $264 million for other spending. A conference committee met in the final days of the legislative session to negotiate differences between the House and Senate budgets. That way the same budget bill can pass through both chambers and onto Gov. Mike Dunleavy's desk. The committee restored some funding that the Senate had cut from its draft budget. Just under $14 million in state funding was approved for behavioral health programs with Anchorage in the midst of a homelessness crisis. Another $14 million was approved for child care, including $7.7 million in subsidies for the sector, and $5.6 million in additional assistance for families. However, those assistance payments are contingent on a separate child care bill becoming law. The Senate on Tuesday also approved drawing close to $200 million from the state's main savings account — the $2.8 billion Constitutional Budget Reserve — to balance the budget for the current fiscal year that ends June 30. To draw from that account requires support from three-quarters of the House and Senate. The Senate easily cleared that threshold on Tuesday. Eighteen of 20 senators voted to draw from savings to balance the current fiscal year's budget. Only Hughes and Myers voted no. If that three-quarter vote fails in the House, almost $200 million would be drawn from the state's investment bank, the Alaska Industrial Development and Export Authority, and from a fund that pays college scholarships to bridge the current fiscal year's fiscal shortfall. Hoffman said the need for extra funding for the current fiscal year was partly due to a drop in oil prices. He said that virtually all of the appropriation requests in the supplemental budget came from the Dunleavy administration. Shower, the Senate minority leader, said before the vote that lawmakers had already approved the appropriations being considered last year. He spoke in support of the savings draw and said, "This is just one of those things that we have to do." This is a developing story. Check back for updates.
Yahoo
25-04-2025
- Business
- Yahoo
Alaska Senate committee's draft budget cuts $206 million from House plan but still has deficit
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. SUPPORT: YOU MAKE OUR WORK POSSIBLE
Yahoo
27-03-2025
- Business
- Yahoo
Alaska legislators look to savings account for deficit fix
The snow-covered statue of WIlliam Henry Seward stands Monday, March 17, 2025, in front of the Alaska Capitol. (Photo by James Brooks/Alaska Beacon) Members of the Alaska Legislature said this week that they're likely to use the state's Constitutional Budget Reserve to fix a roughly $173 million budget deficit for the 12 months that end June 30. Lawmakers are confronting another, larger deficit as they craft the budget for the fiscal year that begins July 1, but it remains possible that some tax increases — on oil, business income and online sales — could offset the need to spend from savings for that year. When it comes to the current fiscal year, things are more certain. Passing new taxes and implementing them would take time, and the state's budget needs to be balanced by June 30. While members of the Senate's bipartisan coalition majority previously rejected the idea of spending from savings, they admitted this week that there is no other option. 'Times change, things change, and sometimes you have to eat crow up here,' said Senate President Gary Stevens, R-Kodiak, during a news conference with reporters. Spending from the state's $2.8 billion Constitutional Budget Reserve will require the approval of three-quarters of the state Senate, plus three-quarters of the state House. Reaching those thresholds will require the support of the Republican minority caucuses in both the Senate and the House. It isn't clear what political horse-trading — if any — will be required to get the needed Republican support. About half of the deficit in this year's budget is attributable to lower-than-expected oil revenue. The other half is due to budget changes proposed by Gov. Mike Dunleavy, whom the Republican minority caucuses generally support. Among the budget additions: $10 million for the Alaska Seafood Marketing Institute, millions for wildfire firefighting, and $2.7 million to cover missed payments by the state to employees' retirement accounts. As of Wednesday afternoon, members of the House Finance Committee were debating the use of the budget reserve for the upcoming fiscal year as well as the current one, but those debates had yet to reach a resolution. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
Yahoo
04-02-2025
- Business
- Yahoo
Alaska is running a significant deficit, latest fiscal estimates show
Sen. Bert Stedman, R-Sitka, presides over a meeting Friday, Jan. 20, 2023, of the Alaska Senate Finance Committee in the state Capitol at Juneau, Alaska. (Photo by James Brooks/Alaska Beacon) The state of Alaska is bringing in less money than it is spending, and is on pace to finish the current fiscal year with a deficit of $171 million, according to figures presented Tuesday. Lacey Sanders, Gov. Mike Dunleavy's top budget official, told the Senate Finance Committee that spending from the Constitutional Budget Reserve likely will be needed to close the gap. To do this would require support from three-quarters of the House and three-quarters of the Senate. That's a critical threshold: Neither the majority caucus in the House nor the majority caucus in the Senate have enough votes, requiring negotiations with the all-Republican minority caucuses in each body. While Tuesday's numbers appear grim, they may not be as bad as they seem. That's because they rely on last fall's estimate of oil price and production. At that time, the Alaska Department of Revenue estimated that North Slope oil would have an average value of $74 per barrel for the current fiscal year, which ends July 1. Through Monday, the average price has been $76. In this price range, every dollar difference is worth between $35 million and $40 million, said Alexei Painter, director of the Legislative Finance Division, last week. If prices stay around $76, it's likely enough to drive the deficit to less than $100 million. The Department of Revenue is expected to release an updated revenue forecast later this spring. Much of the remaining deficit comes from late budget revisions proposed by Dunleavy. Those revisions are normal: Every year, the governor and legislators revise the budget they passed the previous year by enacting a 'supplemental budget' to deal with things like unforeseen expenses or unexpected federal grants. Tuesday is the last day for Dunleavy to add or subtract items to the supplemental budget. This year, Dunleavy has requested $97.5 million in supplemental operating budget changes, and that cost is included in the $171 million deficit estimate. Those changes are spread across two separate bills — a 'fast-track' budget bill designed to pass ahead of the main budget, and the main budget for the fiscal year that starts July 1. The $97.5 million includes only general-purpose state revenue, known formally as 'undesignated general funds.' There are almost $550 million in supplemental changes overall, if federally funded and fee-funded changes are included. Lawmakers could revise those figures upward or downward by adding or subtracting items from the governor's proposal. Normally, the items funded by general-purpose revenue garner the most attention because those contribute to the deficit. The biggest single item, one proposed by the governor in December, is $50 million for the Alaska Gasline Development Corp. to continue work on the proposed trans-Alaska natural gas pipeline. The $50 million would be used to underwrite the participation of a third-party company in development of the pipeline's front-end engineering and design. According to documents provided to the Legislature, If the company decides to not proceed with the pipeline after that work is done, it would receive the $50 million. If it decides to go ahead, the company would assume the cost and the state would keep the $50 million. Another $10 million has been earmarked for the Alaska Seafood Marketing Institute, there's an additional $14.2 million for Medicaid expenses, $3.9 million in pay increases for the Department of Corrections, and almost $2.8 million to pay for court cases lost by the Department of Law. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
