House passes its version of state budget

The state House passed its version of a Fiscal Year 2020 operating budget, rejecting large spending reductions proposed by Gov. Mike Dunleavy but trimming $200 million from the current FY 2019 budget.

House members voted 24 to 14 along partisan lines to send House Bill 39 on to the state Senate.

Senators are completing their own version of the operating budget, which is expected to have deeper reductions than the House but not the $1.6 billion in cuts the governor proposed in his budget plan.

Dunleavy is pushing for large cuts in spending to bring the budget in line with expected revenues, but the governor’s plan is also designed to leave money for a $3,000 Permanent Fund Dividend to be paid this fall.

Legislators are working on alternative proposals that would impose cuts that are less severe but with a smaller dividend payout.

Although the House did not include a PFD in its budget, which prompted criticism from Republicans in the body, the budget that passed Friday would leave enough money for a $1,284 PFD and would fund most of the essential state services, said Rep. Neal Foster, D-Nome, who cochairs the House Finance Committee.

Among reductions in the House budget is $72.9 million cut from the Department of Health and Social Services, primarily in Medicaid; $49 million in a reduction of the school bond debt reimbursement program; $14.5 million from the Department of Transportation and Public Facilities budget, with $10 million of this from the state ferry system; $13 million from the Department of Corrections, and $10 million from the University of Alaska.

The budget also has money for the FY 2021 K-12 education budget, which the Legislature approves on a “forward funding” basis (the FY 2020 funding for schools was approved last year) as well as money for early childhood education and grants for public broadcasting infrastructure.

On the K-12 education funding, state Attorney General Kevin Clarkson has written a letter to legislators raising legal questions about the forward funding. Based on this, the governor may move to restrict the release of funds to school districts.

On the corrections department appropriation, the House approval of funding was done in a way that will restrict the governor from sending 500 inmates to Lower 48 prisons, as he has proposed, and instead encourage more in-state services like halfway houses and electronic monitoring that will ease a released prisoner’s return to society.

House Republicans were critical of the budget as it passed. Rep. Cathy Tilton, R-Wasilla, said she was disappointed that the full House rejected amendments to HB 39 made in the Finance Committee that would have reduced spending further.

Rep. DeLena Johnson, R-Palmer, said the House Majority rejected offers from agencies to reduce spending, instead approving a larger budget. Johnson was referring to proposals for reduced Medicaid funding put forth by the Department of Health and Social Services.

Minority Leader Lance Pruitt, R-Anchorage, said the House Majority effectively cut off debate on the budget by delaying consideration of a number of proposed amendments and then advancing the bill for passage without allowing a discussion of the amendments.

“Everyone should have been allowed a full discussion and an opportunity to express their thoughts,” Pruitt said.

Pruitt’s assertion was disputed, however, by Rep. Tammie Wilson, R-North Pole, who cochairs the House Finance Committee along with Foster.

An intensive budget subcommittee process allowed most legislators to contribute their ideas and further amendments were debated, and changes made, in the House Finance Committee and then on the floor of the House, Wilson said.

“For some to argue the process was unfair is simply not true,” she said.

Also, the assertion by critics that the House had started with the budget introduced by former Gov. Bill Walker is untrue, Wilson said.

“We started with the (current) adjusted budget and considered each of the governor’s additions and deletions in subcommittees,” she said.