Sen. Lyman Hoffman, D-Bethel, presents House Bill 321, the “fast-track” supplemental budget bill, Friday, March 16, 2018 on the floor of the Alaska Senate. (Daniel McDonald | Alaska Senate Majority)

Sen. Lyman Hoffman, D-Bethel, presents House Bill 321, the “fast-track” supplemental budget bill, Friday, March 16, 2018 on the floor of the Alaska Senate. (Daniel McDonald | Alaska Senate Majority)

Alaska Legislature passes bill to avert shutdown of Medicaid, ferries

The Alaska Legislature on Friday morning approved a stopgap spending plan that keeps the Alaska Marine Highway System operating and the state’s Medicaid program working.

In a 16-1 vote, the Alaska Senate approved House Bill 321, which contains the state’s “fast-track” appropriations bill. The Alaska House of Representatives approved the bill 32-7 on Monday.

Without action by the Legislature, the Alaska Marine Highway would have been forced to shut down on April 16. The state’s Medicaid program would have lacked the money to pay doctors, possibly as soon as month’s end.

The bill must be formally transmitted to Gov. Bill Walker and be double-checked by lawyers and financial experts. Walker press secretary Austin Baird said the governor will not sign it until next week.

“It has not yet formally been delivered to the governor’s administration, but as soon as it’s received, it will be expedited,” Baird said.

HB 321 contains $110.2 million in spending for a variety of state programs. There’s $5 million for the Alaska Permanent Fund Corporation because the corporation’s investments have grown so much that they need authorization to spend more on management fees.

There’s $30 million for the state’s community revenue sharing program, which sends millions to towns, cities and unincorporated communities across the state. Much of the revenue sharing money will be paid for indirectly with a $25 million refund from the state’s medical reinsurance program.

The Alaska Department of Corrections will receive $18.3 million to accommodate an unexpectedly large number of prison inmates caused by a surge in statewide crime.

The Alaska Marine Highway System will get $24 million to correct a shortfall in the state’s Marine Highway Fund.

The biggest single component of the bill is $45 million for Medicaid, enough to partially correct a shortfall caused by Legislative underfunding and an increase in the number of Alaskans in the program.

Administrators had warned that the program might have to stop paying doctors’ bills as soon as the end of March. The additional funding is expected to extend that deadline until mid-May, about the same time as the end of the constitutionally limited 121-day Legislative session.

Lawmakers are expected to consider an additional supplemental funding bill to fund Medicaid from mid-May to the end of the state’s fiscal year, June 30. If they fail to pass a supplement, the Medicaid program could face another shutdown in May or June. Funding past June 30 would be determined by the state’s fiscal year 2019 budget, which is also being considered in the Legislature.

Senate Majority Leader Peter Micciche, R-Soldotna, said Friday on the Senate floor that no one should expect the Senate to “rubber stamp” any supplemental funding requests this year.

Dividend bill fails to advance

In separate action Friday, the Alaska Senate declined to advance House Bill 127, a measure to restore the Permanent Fund Dividends of Alaskans who have had them withheld due to a wrongful conviction. Under Alaska law, the state may confiscate the dividends of Alaskans who are convicted of serious crimes. The money is used to offset the cost of incarceration or to pay crime victims.

The bill is seen as a benefit to the Fairbanks Four, four Fairbanks men whose murder convictions were overturned after more than a decade of work by journalists and activists.

HB 127 passed the House in a 38-1 vote last year, but it has never received a hearing in the Alaska Senate. In a parliamentary maneuver Friday, the Alaska Senate’s Democratic minority attempted to force the bill from the Senate State Affairs Committee. That maneuver failed 4-13.

• Contact reporter James Brooks at or 523-2258.

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