Alaska News

Alaska House set to consider potential budget deal

The contours of a potential state budget deal began to emerge Friday evening, with Alaska House lawmakers poised for a late-night vote on a new proposal with about $15 million in concessions made by the Republican-led majority to the Democratic minority.

They include budget additions of $2 million for ferry service, $5 million for the university system, $3 million for a program that makes cash payments to low- and moderate-income senior citizens, $2.5 million for social workers and $2 million in grants for pre-kindergarten.

The proposal left the Legislature "inches" or "feet" away from adjournment, depending on whom was asked, 130 days after the start of its 90-day session and just over a month from a partial government shutdown.

Lawmakers said Friday they'd been spurred by the prospect of layoff warnings that would be mailed Monday to about 10,000 public employees, and are already printed and stuffed into envelopes.

The Republicans' new proposal came in a budget amendment drafted by the office of Rep. Mark Neuman, R-Big Lake, co-chair of the House Finance Committee, who said he planned to offer it Friday night after the House resumed debate at 10 p.m. following a dinner break.

House Speaker Mike Chenault, R-Nikiski, said members of his majority caucus felt that Neuman's amendment "may be the way to get out of here."

"It's a compromise, and we'll see where the votes fall out -- if we take a vote on it," he said.

ADVERTISEMENT

It was not immediately clear, however, whether the Democratic minority would accept the proposal.

In an interview, Rep. Scott Kawasaki, D-Fairbanks, said the amendment from Neuman was "in the spirit of compromise."

He described the two caucuses as still remaining "feet apart," in contrast with an earlier comment from House Majority Leader Charisse Millett, R-Anchorage, that lawmakers were "inches away."

"But we're coalescing around a concept," Kawasaki said.

Another question was whether the proposal would be acceptable to members of the Republican-led majority in the Senate, which has favored cuts steeper than those of their counterparts in the House.

Sen. John Coghill, R-North Pole, said he hadn't seen the specifics of the deal being considered by the House. But "a couple things that the Senate's not interested in," he added, were "spending more money" and funding pay raises for state workers.

The deal under consideration in the House would omit language in a previous version of the budget that canceled raises scheduled for state employees.

"We'll have to see what actually comes of that language," said Coghill, the Senate majority leader. "And if they pass it over to us, we'll have to take it seriously."

Alaska is facing a multibillion-dollar budget deficit this year stemming from a drop in the price of oil, which the state relies on for the majority of its revenue through taxes and royalties.

Democrats' support for a budget deal is necessary for the House to clear a three-quarters voting threshold required to tap billions of dollars in a state savings account.

The minority rejected an offer from the majority earlier this week that included about $17 million in additional spending to restore some money proposed to be cut from the state's education budget, and to fund the raises for state workers.

Those two elements are contained in the current budget bill before the House and would not be altered by Neuman's amendment. But the amendment does not include any language related to expansion of the public Medicaid health care program, which was a priority for Democrats and Gov. Bill Walker.

House Democrats were meeting during a two-hour break Friday night to discuss whether to take the deal. The minority leader, Anchorage Rep. Chris Tuck, said there was "still some heartburn over what's being proposed."

Earlier in the day, the Senate met briefly but ultimately closed its session without taking any action as it awaited a deal in the House. Coghill said he would return to the Legislature's Anchorage offices later in the evening "to see what passes."

The House didn't convene until 6:30 p.m., when it debated a Democratic budget amendment related to the public Medicaid health care program that ultimately failed. Members then took a dinner break, with at least one lawmaker retreating to the bar across the street for a drink with a labor lobbyist.

House members spent much of Friday in negotiations between and among their caucuses, which took place in offices but also spilled out into the parking lot next to the building. Several were noticeably rumpled and said they were exhausted after a marathon session the day before, which left lawmakers running on few hours of sleep.

Some lawmakers from outside Anchorage slept on friends' couches.

ADVERTISEMENT

It was unclear what would happen if the House Democrats rejected the potential budget deal. The Republican majority has introduced an alternative spending plan that could be passed without Democratic support, but it relies on a fiscal maneuver involving a transfer of money between two accounts of the Alaska Permanent Fund.

Some members of the majority have said they wouldn't vote for that plan. Two committee hearings on the proposal scheduled for Friday were canceled.

Nathaniel Herz

Anchorage-based independent journalist Nathaniel Herz has been a reporter in Alaska for nearly a decade, with stints at the Anchorage Daily News and Alaska Public Media. Read his newsletter, Northern Journal, at natherz.substack.com

ADVERTISEMENT