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Senate budget cuts exceed those proposed by House and governor

  • Author: Pat Forgey
  • Updated: September 28, 2016
  • Published April 3, 2015

JUNEAU -- Winning a game of budget-cutting one-upmanship, the Alaska Senate went last and Friday evening passed a state budget calling for deeper cuts than did the House of Representatives and than had been originally proposed by Gov. Bill Walker.

The Senate cut $100 million more from the operating budget than did the House, much of which came in a surprise $47 million cut to the per-student school funding called the "base student allocation" that was made Thursday by the Senate Finance Committee.

Including the cuts by the House and governor, next year's total operating budget has now been cut by $472 million, Senate leaders said.

The cuts were necessary, said Sen. Pete Kelly, R-Fairbanks, the Senate's top budget writer.

"We've got a big problem," said Kelly, co-chair of the Senate Finance Committee.

Falling oil prices mean cuts and more cuts. "That's what this budget is all about," he said.

But the cuts had opponents, as Democrats spent hours trying unsuccessfully to persuade the Republican-led majority to shift cuts away from education and public services.

Sen. Bill Wielechowski, D-Anchorage, criticized not just the cuts but the manner in which they were made on Thursday.

"I don't think anybody had any idea this was going to be sprung on people," he said.

The Senate introduced the proposed cuts in Kelly's Finance Committee, adopted them, and the full Senate was voting on them in under 24 hours and without public hearings, Wielechowski said.

Kelly's cuts to school districts came on top of Walker's rejection of an earlier negotiated budget increase, as well as cuts to the Department of Education and Early Development that were among the biggest facing any state department .

When Sen Mike Dunleavy, R-Wasilla, earlier proposed the departmental cuts included in the budget, he said they'd managed to make cuts without reducing the per-student funding for districts.

On the Senate floor Friday, Kelly said everyone in the Senate supported education and that the impact of the cuts was being overstated.

"I know it's going to have an impact on school districts, but we're not talking about ending funding," he said.

As word of the cuts spread among school districts, their representatives began speaking out against them and reaching out to their legislators.

"I'm very concerned that the Legislature is proposing these further reductions to education funding, particularly this late in our process of budgeting and staffing for next year," said Sean Dusek, Kenai Peninsula Borough School District superintendent.

The Peninsula's Rep. Mike Chenault, R-Nikiski, said the Senate's cuts were probably too deep, and the House of Representatives might work to restore at least some of them as the budget process continues.

"We're not crazy about the education cuts -- some of the others we might be able to live with, but education is important to our caucus," he said.

Chenault pointed out that those cuts came in addition to Walker's earlier cuts.

"While we might not be able to go after the money the governor cut out, we're certainly concerned about taking more money out of the BSA," said Chenault, who is also House speaker.

Senate President Kevin Meyer, R-Anchorage, said that when word of the Senate Finance Committee's cuts yesterday got out, the public comments shifted from advocating for budget cuts to complaining about budget cuts.

"All the emails I'm getting today are certainly 'restore the education cuts,'" said Meyer, who nonetheless voted for the cuts.

Also controversial were cuts to public employee cost-of-living raises, but Sen. Anna MacKinnon, R-Anchorage, said cutting raises was better than layoffs.

"First and foremost I want to say thank you to the public servants who serve the people of Alaska," she said, but the raises were negotiated "subject to funding being available" and that it was better for an employee to take a pay cut than lose their job.

Democrats proposed several cuts of their own, including the Commercial Fisheries Entry Commission, the Workers Compensation Appeals Commission, and to salaries of employees who make more than $200,000 per year at the Alaska Housing Finance Corp., but all were rejected. A single Democratic amendment, calling for a report on public employees who earn more than the governor, was approved.

Sen. Johnny Ellis, D-Anchorage, tried to eliminate budget language seeking to stop Medicaid expansion in Alaska by blocking acceptance of federal funds for expansion.

"When did we start rejecting federal funds?" he asked, reminding his colleagues that when former Gov. Sarah Palin rejected federal stimulus money, the Legislature called itself into special session to override her veto.

"People were shocked. We don't reject federal funds -- they're a third of our economy," he said.

Sen. Dennis Egan, D-Juneau, urged money be put back into the budget for the Alaska Marine Highway System, saying cuts the Legislature has proposed would mean thousands of already sold ferry tickets would have to be refunded, costing the state money and disrupting travel schedules.

That's not what he said he'd have done in his 40-plus years in private business before becoming a legislator..

"I know we have to cut the budget, but you don't spit on your customers," he said.

His proposed budget amendment failed but won support from Republican Sens. Bert Stedman, R-Sitka, and Gary Stevens, R-Kodiak.

The differences between the House and Senate versions of the operating budget mean a conference committee will have to work out the differences, a process that's expected to start late next week.

Also next week, work is expected to be done publicly on the state's other large budget, the capital budget. So far, that's all been done behind closed doors, with legislators keeping secret any requests for capital projects.

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