Budget, Medicaid battle persists

PALMER — Even as legislators and Gov. Bill Walker shook hands and posed for pictures Tuesday, parties in an ongoing series of budget negotiations jockeyed for political position on issues consuming state politics.

Frustration with a budget standoff, education cuts, and inaction on Medicaid expansion also seeped into a public hearing Friday for a new legislative measure taken up by the Alaska House of Representatives finance committee. The bill in question, House Bill 2001, essentially restores the portion of the budget vetoed by Walker. Earlier this week, Gov. Walker vetoed a large portion of the Legislature’s approved budget because it lacked a funding source.

Legislators had sought to tap the Constitutional Budge Reserve to fund the plan, but lacked the votes for approval.

More than 80 people testified in the hearing, including Matanuska Education Association president Tim Walters. The Mat-Su School system has only recently managed to fight its way back from years of flat revenue funding in the face of rapidly increasing school age population, Walters told members of the committee. As a result, class sizes for all grades have soared, he said.

“Class sizes of 32-plus in high schools are not uncommon,” Walters said. “Imagine a kindergarten class of 26 five-year-olds all using scissors at once.”

The line drew big laughs from legislators. But the issue is serious, Walters said.

“Cuts to public education also result in things like history or science classes being taught halftime,” he said. “Those things already occur. Cutting public education funding any more will make that worse.”

Department of Natural Resources Ranger Andrew McElvain of Willow told legislators he was deeply disappointed in them. He said they should use the budget reserve to bridge the gap, and they should also consider Medicaid expansion. Legislators had committed to three years of stable funding for the state’s public education system the previous year, and this year’s cuts created distrust, McElvain said.

The change showed a “willingness to go back on their word,” he said. “If the state is unwilling to be good on their contracts, I wonder how that will pan out on something like a gas pipeline.”

Not just voters

Valley voters aren’t the only ones expressing displeasure over the direction of state of budget negotiations.

Valley Rep. Jim Colver (R-Palmer) was among six members of the house majority who signed a letter Wednesday urging Alaska House of Representatives Speaker Mike Chenault to continue working to get the necessary votes to reach the two-thirds majority needed to unlock the budget reserve — instead of tapping the Alaska Permanent Fund.

“We feel that resorting to Permanent Fund earnings so suddenly as part of a solution to the impasse will sow grave confusion and mistrust among Alaskans,” the letter reads in part. “Furthermore, we strongly believe that major actions having to do with the Permanent Fund, such as this, should go before voters.”

But not all legislators were willing to clash with the leadership. While in the Valley to sign a new law requiring Medicaid recipients to use refurbished or used-but-durable medical equipment — such as wheelchairs — Rep. Lynn Gattis (R-Wasilla), a member of the house finance committee, said legislators are returning to the fiscal drawing board.

“I think we’ll have to start all over again with a new bill,” she said Tuesday.

Playing politics?

In addition to passing a funded budget, legislators also were instructed to consider passage of Erin’s Law and approval of the Medicaid expansion and reform effort.

Gattis said she’s keenly interested in reforming the Medicaid system before adding more people to the roles.

Despite what the governor’s office has reported as 6 to 1 support for Medicaid expansion during public testimony, the Legislature has not been swayed to accept the funding.

Legislators took their opposition a step farther by writing it into the state budget document. For example, the capital budget, which Walker signed, ties expansion to “an acceptable reformation plan and appropriation approved by the legislature.”

Federal funds for other programs, including the Exxon Valdez Oil Spill Trust, Alaska Housing Finance Corporation, Alaska Marine Highway, University of Alaska, commercial fisheries, and the Alaska Aerospace Corporation are appropriated only under an existing code requiring the governor to submit a plan for any other potential increases to the Budget and Audit committee.

Gattis cited widespread problems with a Xerox-constructed Medicaid billing system as one reason to pursue reform ahead of expansion.

“There are people here that have come to me, very graciously and civil and said ‘My daughter works for x, y, z, and we’re not getting paid,’” she said.

Gov. Walker argued that the vendor payment issue has been largely resolved, and 90 percent of claims filed are now paid

He said the focus of current efforts is on the backlog of unpaid claims arising from the Xerox system’s malfunction.

“It’s not something where we do reform today and not tomorrow,” Walker said. “It’s an ongoing thing.”

The language in the budget limited his options to tackle the budget and Medicaid, Walker said.

“I can veto specific expenditure options, but not specific language,” he said.

Walker spoke Tuesday while signing bills in the Mat-Su Borough, prior to Thursday’s procedural gymnastics, when the Legislature gaveled in a governor-called special session called in Juneau, then gaveled out to reconvene at the Anchorage Legislative Information Office, removing Medicaid expansion from the agenda in the process.

The non-partisan Legislative Legal Services issued an opinion saying votes taken by the Legislature in Anchorage likely violate Alaska’s Constitution because the special session proclamation specifically called for convening in Juneau.

The Senate introduced and passed the same version of the budget Thursday vetoed by Walker Monday, and are now eyeing the Permanent Fund as its funding source, rather than the budget reserve.

Gov. Walker appeared willing to wait for legislators to come to him on the Medicaid issue Tuesday. The budget language was “disappointing,” but officials would simply try again, Walker said.

“Yeah, we’re going to have to continue to work on Medicaid expansion,” he said. “If it doesn’t happen this year, and it looks like it won’t, then we’ll look at it for next year.”

For now, finances top physicians, Walker said.

“I need a fully funded budget,” he said.

Contact Brian O’Connor at 352-2269, brian.oconnor@frontiersman.com, or on Twitter @reporterbriano.