Tough budget decisions remain in Alaska

  • By Becky Bohrer
  • Tuesday, June 30, 2015 11:36pm
  • News

JUNEAU, Alaska (AP) — It took two special sessions for Alaska legislators to agree to a budget after a crash in oil prices contributed to a severe reduction in the state’s available revenue.

Barring a huge rebound in oil prices, things aren’t expected to get much easier next session.

While legislators made big cuts in spending, they likely won’t be able to repeat the same level of cuts to Alaska’s infrastructure budget, for which the use of unrestricted state funds was reduced largely to the amount needed to meet federal matching-grant requirements.

Cuts to agency operations are always tough, Legislative Finance Division Director David Teal said. The lengthy legislative debate this year — which prompted preparations for a potential government shutdown — bore that out. Next year is an election year.

There was no shutdown — lawmakers passed an operating budget June 11 — and notices warning of layoffs if a budget wasn’t passed by July 1 were rescinded. But with the implementation of the new budget, the cuts put in place will start to be felt.

Gov. Bill Walker signed the operating and capital budgets late Monday, spokeswoman Katie Marquette said by text message Tuesday. The new fiscal year starts Wednesday.

Legislators this year focused on cuts and reducing the size of government in this oil-reliant state before beginning talks in earnest about ways to raise revenue.

In early June, Walker began that discussion with the public. Walker hasn’t settled on a specific revenue solution, Marquette said by email. The governor plans to continue talks with the public about building fiscal stability for Alaska and with the Legislature, to gauge its interest in the appropriate time to introduce revenue legislation, she said.

Disagreements over school funding and negotiated cost-of-living increases for union workers were among the sticking points as lawmakers grappled with the budget last session. Minority Democrats also held out to reverse or lessen cuts in other areas. Support from House Democrats was needed to access a budget reserve fund to cover costs.

The spending plan does not forward-fund education, Teal said, meaning legislators will have to come up with an education budget for the next session.

The budget included language stating the Legislature intends for the cost-of-living increases ultimately approved for union and non-union workers to be one-time raises and that there can be no such increases beginning with contracts negotiated in 2015. It suggests provisions be added to the labor agreements allowing them to be reopened if oil prices reach or fall to certain levels.

Jim Duncan, executive director of the Alaska State Employees Association, said he expects tough negotiations. His union is among those scheduled to begin talks this year with the state for a new three-year deal.

“We realize what the financial position of the state is and to expect large monetary increases or maybe even any monetary increases in the first year of the contract may not be realistic,” he said. “But on the other hand, I’m quite sure the union is going to approach it with the idea that we do not want to give up anything, we don’t want to take steps back but that we’ll work with the administration in order to address the immediate fiscal crisis, the immediate fiscal needs so that we can continue to move forward.”

With the budget cuts, it’s expected state workers will be laid off. The state plans to take advantage of retirements and attrition as much as possible to address position cuts across departments, Marquette has said. But up to 200 people could be laid off. The number was being finalized. University of Alaska spokeswoman Kate Wattum did not have an immediate estimate of layoffs within that system. Nearly 170 executive-level staff would be taking unpaid furloughs of five, seven or 10 days with the start of the fiscal year, she said.

The Alaska Marine Highway System is proposing winter-season changes that include service reductions. Some ships are expected to undergo maintenance in the winter, contributing to service reductions, spokesman Jeremy Woodrow said. The system has also proposed laying up the vessel Taku for the entire fiscal year as a cost-saving measure, directly tied to the budget cuts, he said. Public comment is being taken on the plans.

More in News

The Sterling Highway crosses the Kenai River near the Russian River Campground on March 15, 2020, near Cooper Landing, Alaska. (Jeff Helminiak/Peninsula Clarion)
Russian River Campground closed for construction

The campground is expected to reopen on June 2

A man fishes in the Kenai River on July 16, 2018, in Soldotna, Alaska. (Peninsula Clarion/file)
Fish and Game announces series of closures and restrictions for king salmon fisheries

Cook Inlet king salmon stocks are experiencing a prolonged period of poor productivity, the department said

Montessori materials sit on shelves in a classroom at Soldotna Montessori Charter School on Tuesday, Sept. 20, 2022 in Soldotna, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
Education debate draws state attention to peninsula charter schools

Dunleavy would like to see a shift of authority over charter school approvals from local school districts to the state

The Nikiski Senior Center stands under sunlight in Nikiski, Alaska, on Thursday, March 14, 2024. (Jake Dye/Peninsula Clarion)
Support available for community caregivers

Nikiski Senior Center hosts relaunched Kenai Peninsula Family Caregiver Support Program

Flags flank the entrance to Gov. Mike Dunleavy’s office on Thursday, March 14, 2024, in Juneau, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
Dunleavy vetoes bipartisan education bill

Senate Bill 140 passed the House by a vote of 38-2 and the Senate by a vote of 18-1 last month

The Alaska State Capitol on Friday, March 1, 2024, in Juneau, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
House passes bill altering wording of sex crimes against children

The bill is sponsored by Rep. Sarah Vance, R-Homer

Ben Meyer and Brandon Drzazgowski present to the Soldotna and Kenai Chambers of Commerce at the Soldotna Regional Sports Complex in Soldotna, Alaska, on Wednesday, March 13, 2024. (Jake Dye/Peninsula Clarion)
Kenai Watershed Forum gives update on streambank restoration

The watershed forum and other organizations are working to repair habitat and mitigate erosion

The entrance to the Kenai Police Department, as seen in Kenai, Alaska, on April 1, 2020. (Photo by Brian Mazurek/Peninsula Clarion)
Kenai resident arrested on charges of arson

Kenai Police and Kenai Fire Department responded to a structure fire near Mountain View Elementary

Sen. Jesse Bjorkman, R-Nikiski, speaks in opposition to an executive order that would abolish the Board of Certified Direct-Entry Midwives during a joint legislative session on Tuesday, March 12, 2024 in Juneau, Alaska. (Ashlyn O'Hara/Peninsula Clarion)
Legislature kills most of Dunleavy’s executive orders in rare joint session

All the proposed orders would have shuffled or eliminated the responsibilities of various state boards

Most Read