House Finance unveils operating budget

The $9.7 billion operating budget is 2 percent less than what Gov. Parnell proposed

JUNEAU — The House Finance Committee unveiled a $9.7 billion operating budget for Alaska on Monday, 2 percent less than Gov. Sean Parnell proposed.


An analysis of the bill shows the proposal is lower than Parnell’s for all agencies, except for corrections, which is the same. The highest percentage change came to the budget for the governor’s office, with the committee recommending that the $1.75 million requested for redistricting costs be considered for inclusion in the supplemental budget for this year.

Public testimony on the operating budget is scheduled for Tuesday and Wednesday. The bill is expected on the House floor for a vote as early as next week. It then goes to the Senate for additional review.

Legislators have been looking for ways to limit the growth of state government in the face of declining oil production. Alaska relies heavily on oil revenues to run, and higher prices in recent years have helped to mask the impact of the production decline. The Legislative Finance Division, in a report earlier this year, cautioned that if next year’s budget is the same as this year’s budget, the price of oil would have to be an estimated $115 a barrel to balance. The price for North Slope oil was about $106 on Monday.

Lawmakers have been told the state is facing a budget deficit of about $323 million this fiscal year, in part due to lower-than-expected oil prices. That hole is expected to be filled with reserves.

The budget proposal released Monday trims $8.4 million for behavioral health programs. Alaska Democrats, on their Facebook page, labeled these “draconian cuts.”

“Have the House Republicans already forgotten Newtown, a tragic reminder of how untreated mental problems put whole communities at risk?” the posting by the party said, referring to the deadly Connecticut shooting last year.

Rep. Mark Neuman, R-Big Lake, who chaired the subcommittee overseeing the Department of Health and Social Services’ budget, said an additional $9 million was put toward behavioral health programs in this year’s budget. He said nearly $8.4 million wasn’t spent, thus the decision to reduce the allocation by that amount.

“If anybody thinks making those reductions was easy, let me tell you: That was the worst day I’ve ever had in the Legislature,” he said. “That was extremely difficult, but we don’t have a choice.”

Limiting growth in state government is necessary so there’s money for infrastructure or capital projects, Neuman said.

If there’s no money for the capital budget, “then there’s no money for jobs. If we don’t have money for jobs ... the HSS budget will continue to grow even faster because of the financial strains that are put on families when we don’t have capital expenditures out there, that do cause the drug abuse, sexual abuse, family abuses, spousal abuses — all those terrible things that become part of our society because of financial strains on the families,” Neuman said.

A capital budget hasn’t been released, but legislative leaders have tried to temper expectations for next year’s version.

The operating budget proposal also would limit administrative costs for department grantees to 15 percent, an effort, Neuman said, to make sure as much money as possible goes to beneficiaries.

Health and education have the largest agency budgets.

On education, Rep. Tammie Wilson, R-North Pole, said the intent is to take a closer look at pre-kindergarten programs during the interim. The House proposal reduces funding for the Best Beginnings and Parents as Teachers programs, funding both at $800,000, and denies a $480,000 funding request for pre-kindergarten grants, putting the funding level for that at $2 million, according to a subcommittee report.

The budget plan also would fund five of the 15 village public safety officers requested by Parnell. The Legislature has granted Parnell’s request for 15 new village public safety officers every year for the past three years, as part of an effort to make communities safer and crack down on domestic violence and sexual assault.

But turnover has been an ongoing problem and not all of the currently authorized positions are filled, said Rep. Bryce Edgmon, D-Dillingham, who chaired the Public Safety subcommittee. The Department of Public Safety has said 92 of the 116 authorized village public safety officer positions are currently filled.


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