A subcommittee of the Alaska House of Representatives is recommending a bigger budget for health services next year, but that increase comes courtesy of the federal government and conceals a $90 million cut in state spending.
On Friday, the Alaska House Finance subcommittee for Health and Social Services recommended a $2.697 billion budget for the department in the fiscal year that starts July 1. That’s an increase of about $80 million.
The federal government is expected to provide the state nearly $160 million more next fiscal year, but the state’s contribution to its health and social services budget is being cut by $90 million at the same time. Fee-funded programs make up most of the rest of the increase.
Because of that budgetary tradeoff, some programs funded primarily by the state are expected to take a budgetary hit. Among the cuts: $3 million for behavioral health, $5.1 million for senior benefits, $1.7 million at the Nome Youth Center (which will close), and nearly $20 million in Medicaid dental services.
With the state facing an annual deficit of between $3.5 billion and $4 billion, legislators are heeding the call of Alaskans to make cuts before seeking new taxes and spending Permanent Fund earnings to fill the rest of the gap.
The subcommittee budget “closeouts” that concluded Friday are recommendations for each department. In the first week of March, the full House Finance Committee will begin considering those recommendations, and the entire House is expected to vote on the budget in the second week of March.
If approved, the budget will head to the Senate, where the process of subcommittee, committee and floor vote will repeat while the House digs into tax and revenue proposals.
Parks take a hit for gas pipeline plan
On Thursday night, the subcommittee devoted to the Department of Natural Resources recommended a $173.2 million budget that includes a $14.1 million increase over the current fiscal year.
Much of that increase is being driven by expenses for the Alaska Liquefied Natural Gas pipeline, and as with the health budget, the increase conceals deep cuts in other areas.
The subcommittee is recommending $26.7 million for the pipeline effort (that figure had been higher until the governor revised it downward, given that interest in the project has cooled with falling oil prices). At the same time, it’s recommending that state parks funding be cut by $328,400 and that the department put off any vehicle purchases not absolutely necessary for public safety.
The subcommittee is also recommending that the department seek to fund $5 million in operations with program fees instead of a direct state subsidy.
Rep. Lance Pruitt, R-Anchorage, expressed frustration that a department he called “the engine of the state” for its permitting and licensing responsibilities, is being forced to take significant cuts.
“Cuts are not invisible; there will be impacts,” he said after the subcommittee approved the budget. “It will be felt in our economy and our services.”
Legislature takes $9 million hit
Lawmakers are suggesting a $65.2 million budget for the Alaska Legislature, down from $74.3 million last year. One of the biggest cuts is $990,000 allocated for performance reviews under a touted program begun in 2013. The program, which called for departments to provide regular reports on their work, was intended to provide information that could make future cuts easier.
Legislative staffers will also be required to take five days of leave without pay next fiscal year, something that will save the Legislature’s budget $727,600.
Governor’s budget mostly flat
After significant cuts before the start of this fiscal year, the budget for the governor’s office is holding relatively flat at $23.9 million. While the governor’s office is making about $294,000 in cuts, those are being patched up with funding from the transportation budget and the state’s elections fund. The Division of Elections, which falls under the governor’s budget, was required under a court settlement to hire two people to translate election materials into Native languages.
Another big hit to Marine Highway
The subcommittee in charge of the budget for the Alaska Department of Transportation, parent of the Alaska Marine Highway, declined to make further cuts beyond a significant decrease suggested by the governor. Walker had suggested a $9.5 million cut to AMHS operations, then another $2.4 million cut to AMHS fuel expenses.
While the subcommittee decided against further cuts, it said AMHS needs to replace $2 million of its general fund subsidy with $2 million in revenue from fees and fares.
Overall, the subcommittee is recommending a $19.8 million decrease from the current fiscal year, to $590.4 million. Only $1.3 million of the cutting work was done by the subcommittee; $18.5 million was cut by the governor.
In addition to the operating budget recommended by the subcommittee, the Department of Transportation receives the lion’s share of the state’s capital budget, a separate balance sheet that keeps track of large-scale construction. With the federal government matching state expenses on a 9-to-1 basis, the state is expected to spend about $100 million on capital projects in the coming year, enough to bring in another $900 million in federal money.
Millions less for Fish and Game
On Thursday, the subcommittee recommending changes to the budget for the Department of Fish and Game approved a $203.6 million recommendation; that figure is down $4.3 million from the current fiscal year.
As with other departments, the cut would have been worse had lawmakers not allowed the department to gather more money from fees.
The subcommittee also requested the department investigate the possibility of replacing its manned-aircraft surveys with drone flights. Such flights are used to measure fish and game populations, and Rep. Shelley Hughes, R-Palmer, suggested it could make sense to use unmanned aircraft to do the job instead.
Hughes also offered budget amendments encouraging the state to increase collaboration among its research divisions and consider cheaper ways to conduct surveys of fishermen and hunters.
Rep. Jonathan Kreiss-Tomkins, D-Sitka, offered an amendment encouraging the department to seek ways to avoid returning federal ammunition tax revenue earmarked for wildlife projects. Fish and Game had warned that it could be forced to return up to $2 million in federal money due to a lack of matching state dollars; Kreiss-Tomkins suggested Fish and Game look to the Department of Natural Resources, local agencies and sportsmen’s associations for relevant projects.
Military academy suffers cut
The Department of Military and Veterans Affairs may see a $4 million cut, to $57.5 million from $61.5 million this year. In its deliberations, the subcommittee in charge of that department’s budget approved the governor’s plan to cut staff from the Alaska Military Youth Academy. That academy, which has been a successful alternative high school for troubled youths, will be unable to accept as many students due to the staff cuts.
The subcommittee also approved mandatory nine-day furloughs for department staff.
In regard to the Alaska Aerospace Corporation, the state-owned agency that owns and operates the Pacific Spaceport on Kodiak Island, the subcommittee recommended the department seek alternatives to state ownership, including privatization of the facility and corporation.
