The votes Sunday and Monday in the Alaska House on the capital budget and the so-called reverse sweep would have fixed two of the four major fiscal problems facing the Alaska Legislature.
All of the items in the capital budget deal with expenses that are happening now — in the fiscal year that started July 1 and that ends June 30, 2020.
The failed reverse sweep means effects now and in the future. Without the reverse sweep, more than $115 million in money earmarked for this year’s operating budget will no longer be available, according to a document provided by the Office of Management and Budget. That’s because 54 separate accounts, according to OMB documents, will be automatically drained into the state’s Constitutional Budget Reserve, and some of those funds were being used in this year’s operating budget.
In addition, the failure of the reverse sweep means those funds will no longer be available to pay expenses in the future, either. The Power Cost Equalization Endowment Fund, for example, contains more than $1.07 billion, according to the Alaska Department of Revenue — but only $33 million was supposed to be spent this year.
The following lists are incomplete — not even OMB or the nonpartisan Legislative Finance Division know the final effects that the failure of the reverse sweep will have. It’s never happened before.
The failure of the capital budget means:
• There is no money to implement the state’s major new anti-criminal legislation, House Bill 49.
• There is no money to unlock nearly $600 million in federal highway and airport construction aid.
• $10 million will not be distributed to pay for new addiction treatment facilities
• The Alaska Department of Environmental Conservation will not receive $12 million for rural water and wastewater projects
• The Alaska Marine Highway will not receive $13.5 million needed to certify and overhaul ferries annually.
• Any money the state gets from selling ferries will go to the state’s general fund instead of being reserved for new ferries.
• The state’s tourism marketing program will lose more than $7 million.
The failure of the reverse sweep vote means:
• An estimated $115 million has been removed from the state’s operating budget, atop the $444 million vetoed by the governor.
• No money for the Alaska Performance Scholarship, Alaska Education Grant or WWAMI medical school program because the Higher Education Investment Fund has been drained.
• No money for rural electrical subsidies, because the Power Cost Equalization Endowment Fund has been drained.
• No money to reduce the cost of vaccines, because the state’s Vaccine Assessment Program fund has been drained.
• The state’s anti-smoking campaigns and alcohol and drug abuse-treatment programs may go unfunded.
• The Alaska Comprehensive Health Insurance Fund, which lowers the cost of Medicaid, may go unfunded.
• Professional license fees paid by barbers, hairdressers, architects, engineers and other state-regulated professions will fluctuate significantly each year based on the number of applicants and work performed that year.