Alaska Legislature adjourns after passing $10.4 billion operating budget

Alaska Legislature adjourns after passing $10.4 billion operating budget

The Alaska Legislature adjourned its 2018 session just before 2 a.m. Sunday morning after passing a $10.4 billion state operating budget that funds ferries, health care and everyday services through summer 2019.

For the first time in state history, the budget includes significant funding from the Alaska Permanent Fund.

“I believe it’s historic that we are using what many refer to as the ‘rainy day account’ for the first time,” said Sen. Lyman Hoffman, D-Bethel, speaking on behalf of the Senate Majority shortly before it voted to approve the budget.

The budget now advances to Gov. Bill Walker for consideration.

In the Legislature’s final day, which extended past midnight, lawmakers passed a raft of new legislation, including things as varied as a statewide raffle to benefit education and a measure allowing distilleries to serve mixed cocktails.

The operating budget is larger than the one passed by the Legislature last year, and more spending was included in the state’s capital construction and renovation budget. Many lawmakers felt the state had cut its budget too far last year, with negative consequences as a result.

Senate Majority Leader Peter Micciche, R-Soldotna, said spending was higher than had been sought by the Senate Majority, which includes 12 Republicans and one Democrat, but lawmakers needed to compromise to end the session before its 121-day constitutional limit.

“I think Alaskans want us to get out of here, and that’s what we’re trying to do,” he said.

Last year, lawmakers worked for more than 210 days, the most of any single year in state history. By adjourning Saturday night, lawmakers in the two-year 30th Legislature worked for 329 days, more than any other two-year session. The old record was 324 days, set by the 24th Legislature.

The Legislature reduced the state’s deficit from about $2.4 billion to less than $700 million by tapping the Alaska Permanent Fund. About $1.7 billion will flow from the Permanent Fund to the state’s general fund. Another $1 billion will go from the fund to pay a $1,600 Permanent Fund Dividend for every Alaskan.

About $674 million will be spent from the state’s Constitutional Budget Reserve to balance the remainder of the deficit. That reserve has been used to cover the deficit for the past several years, but so much has been spent from the fund that it no longer contains enough money to cover the full deficit. With that fact in mind, lawmakers felt they had to spend from the Permanent Fund.

“There is no other choice left,” said Speaker of the House Bryce Edgmon, D-Dillingham.

This year’s budget is predicated upon oil prices averaging $63 per barrel. If oil prices average $72 per barrel, the state will not need to spend from the Constitutional Budget Reserve.

Under the budget, the state will spend $66 million more on Medicaid to meet rising demand from a state with the highest unemployment rate in the nation.

To partially relieve a backlog in public assistance applications, the state will hire 20 new workers and spend $2.2 million more per year to process claims.

The University of Alaska will receive its first budget increase in four years: The state’s contribution to the university will rise from $317 million to $327 million. That’s less than the Board of Regents had requested but more than Walker had suggested.

Crime-fighting efforts, a legislative focus this year, will receive a boost in the budget. A new prosecutor will go to Kotzebue, three to Anchorage, one to Bethel, and a statewide drug prosecutor will go to the state’s special litigation section.

The Department of Public Safety will receive some $500,000 for additional travel to rural areas, less than the $2 million proposed by Walker but more than the department received in the current fiscal year.

The department also received permission and funding for new investigators, a pilot, and criminal justice specialists.

To meet calls from the Public Defender Agency, the budget includes four new full-time defenders and four specialists dealing with cases involving children. The budget also includes more money to pay for work by existing attorneys.

The Alaska Department of Corrections will receive more money as well, because Alaska’s prison population has stayed flat amid a statewide crime wave, instead of falling as expected.


• Contact reporter James Brooks at jbrooks@juneauempire.com or 523-2258.


More in News

Jasmine Chavez, a crew member aboard the Quantum of the Seas cruise ship, waves to her family during a cell phone conversation after disembarking from the ship at Marine Park on May 10. (Mark Sabbatini / Juneau Empire file photo)
Ships in port for the week of July 6

Here’s what to expect this week.

Disney Williams (right) orders coffee from Lorelai Bingham from the Flying Squirrel coffee stand at Juneau International Airport on Thursday. (Mark Sabbatini / Juneau Empire)
New coffee stand at airport stirs up heated dispute about having proper authorization to operate

Fans of Flying Squirrel Espresso praise location, hours; officials say FAA violations could be costly.

Nano Brooks and Emily Mesch file for candidacy on Friday at the City and Borough of Juneau Municipal Clerk’s office in City Hall. (Jasz Garrett / Juneau Empire)
City and Borough of Juneau regular municipal election candidate filing period opens

So far, most vie for Assembly District 2 seat — mayor, Board of Education, and District 1 also open.

Killah Priest performs at the Juneau Arts and Culture Center in December 2019. (Photo courtesy of Lance Mitchell)
Killah Priest sets new record with Alaskan artists on ‘Killah Borealis’

Wu-Tang Clan rapper seeks to lift Alaskan voices and culture in his return performance to Juneau

(Michael Penn / Juneau Empire file photo)
Police calls for Wednesday, July 10, 2024

For Wednesday, July 10 Attempt to Serve At 10:06 a.m. on Wednesday,… Continue reading

Commercial fishing boats are lined up at the dock at Seward’s harbor on June 22. Federal grants totaling a bit over $5 million have been awarded to the Alaska Seafood Marketing Institute to help Alaskans sell more fish to more diverse groups of consumers. (Yereth Rosen/Alaska Beacon)
Federal grants to state agency aim to expand markets for Alaska seafood

More than $5M to help ASMI comes after Gov. Dunleavy vetoed $10M for agency.

Gov. Mike Dunleavy holds up the omnibus crime bill, House Bill 66, after signing it at a ceremony Thursday at the Department of Public Safety’s aircraft hangar at Lake Hood in Anchorage. At his side are Sandy Snodgrass, whose 22-year-old son died in 2021 from a fentanyl overdose, and Angela Harris, who was stabbed in 2022 by a mentally disturbed man at the public library in Anchorage and injured so badly that she now uses a wheelchair. Snodgrass and Harris advocated for provisions in the bill.Behind them are legislators, law enforcement officers and others. (Yereth Rosen/Alaska Beacon)
Goals for new Alaska crime law range from harsher penalties for drug dealers to reducing recidivism

Some celebrate major progress on state’s thorniest crime issues while others criticize the methods.

Juneau Board of Education President Deedie Sorensen (left) and Vice President Emil Mackey, holding his son Emil Mackey IV, listen to discussion about next year’s budget for the school district during a meeting March 14 at Juneau-Douglas High School: Yadaa.at Kalé. Recall votes for both board members were certified this week for the Oct. 1 municipal election ballot. (Mark Sabbatini / Juneau Empire file photo)
Petitions to recall two Juneau school board leaders get enough signatures for Oct. 1 election ballot

President Deedie Sorensen, Vice President Emil Mackey targeted due to school district’s budget crisis.

Most Read