House and Senate negotiators reached a breakthrough compromise on the state’s operating budget Thursday, approving a $10.5 billion spending plan for the coming fiscal year.<\/p>\n
The compromise must now be approved by the full House, full Senate, and Gov. Bill Walker. The budget is the only item constitutionally required by the Legislature, and a successful agreement signals the imminent end of the legislative session.<\/p>\n
“It gets us a big step closer,” Speaker of the House Bryce Edgmon, D-Dillingham, said.<\/p>\n
Senate President Pete Kelly, R-Fairbanks, said he expects the Legislature will adjourn Saturday evening.<\/p>\n
While the budget includes a deficit of about $2.4 billion, lawmakers have already agreed on a plan to address that problem. The Alaska Permanent Fund will be called upon for $1.7 billion, and the state’s Constitutional Budget Reserve will be asked for about $700 million.<\/p>\n
Another $1 billion from the Permanent Fund will pay a $1,600 Permanent Fund Dividend.<\/p>\n
The operating budget increases spending overall from the last budget passed by the Legislature, and Thursday’s agreement doesn’t include millions more in retroactive spending hikes that are included in the state’s capital construction budget.<\/p>\n
The spending plan isn’t an unlimited cornucopia, however. It includes less money than had been requested for Medicaid and the state’s public assistance programs.<\/p>\n
Walker’s budget proposal included a $96 million more for Medicaid, money needed to unlock $360 million in matching federal funds.<\/p>\n
The House accepted that figure, but the Senate suggested a lower increase, $46 million, meaning less federal funding as well.<\/p>\n
The compromise figure is $66 million.<\/p>\n
Shawnda O’Brien, assistant commissioner of the Alaska Department of Health and Social Services, said by phone that she doesn’t know yet what that lower figure will mean for the department. Currently, it projects that it can deal with a $20 million decrease, but a $30 million decrease still leaves a $10 million gap in the fiscal year that starts July 1.<\/p>\n
That gap could widen if lawmakers fail to cover an already-existing gap in funding for the current fiscal year. Right now, there is not enough Medicaid money to pay bills through June 30. Without additional, retroactive funding, money from next fiscal year will be used to pay bills accrued in this fiscal year.<\/p>\n
The operating budget also includes a smaller increase than had been requested for the Division of Public Assistance.<\/p>\n