The legislative committee trying to avert an Alaska government shutdown has agreed on a deal to fund the Alaska Marine Highway, but its solution sets up a bigger problem next year.

In a 20-minute meeting on Tuesday afternoon, the Alaska Legislature’s budgetary conference committee approved budgets for the Alaska Department of Transportation, the state public employee retirement system, and various supplemental items.

The ferry system, which does its work under the Department of Transportation, will use $44 million extra from the Alaska Marine Highway System Fund instead of the state general fund.

The net result is the state’s books will show a $44 million budget cut —until next year, when the Marine Highway System Fund will be too small to do the same thing again, and the state will have to come up with the money.

The idea was drafted by the Senate Majority.

According to budget documents provided to the conference committee on Tuesday, the AMHS Fund will have just $4.13 million remaining after the arrangement.

In a separate action Tuesday, the conference committee agreed to refill some of the AMHS Fund spending by diverting a separate fund (worth about $10 million) to the AMHS Fund.

Rep. Lance Pruitt, R-Anchorage, objected to that move.

He pointed out that lawmakers had overlooked the existence of that separate fund until Rep. Cathy Tilton, R-Wasilla, discovered it was being unused.

“I don’t think anyone even had an idea about this fund until last week,” he said.

He said he was upset that the committee was willing to take the money identified by Tilton but not accept any of the House Republican Minority’s plans for spending it.

(Tilton and Pruitt are members of that minority.)

“It was almost like getting slapped,” Pruitt said.

While the conference committee’s actions may mean troubles later for the Marine Highway, the DOT budget includes a short-term benefit: $2.1 million to prevent further service reductions. That had been suggested by the coalition House Majority and was approved instead of the Senate Majority’s suggestion of $2 million in service cuts.

Rep. Paul Seaton, R-Homer and House chairman of the conference committee, said that Tuesday’s meeting was yet another step toward averting a government shutdown.

“Every one of the agencies and the fund sources that we are able to get agreement on and close helps move us along,” he said.

Getting agreement on the Department of Transportation budget is a particularly important step. At the start of the Legislative session, Senate lawmakers considered DOT’s budget one of the “big four” state departments that would have to take significant cuts.

The others are the Department of Health and Social Services, the University of Alaska, and the Department of Education and Early Development.

Seaton said the conference committee is planning other meetings later this week, and committee staff late Tuesday had posted a note indicating a meeting at 3 p.m. Wednesday.

Lawmakers now have nine days to pass a state operating budget and find a way to fund it. If they do not do so before midnight on the morning of July 1, state services will shut down and all state employees will be laid off.

---

• Contact reporter James Brooks at james.k.brooks@juneauempire.com or call 419-7732.

---