Daily Sitka Sentinel

Budget Battle Leaves Sitka in Good Shape

By TOM HESSE
Sentinel Staff Writer
    The Legislature’s passage of a state budget in Anchorage Thursday, means ferry service will continue, Sitka schools will get $557,000 and a slew of state employees will to go to work as usual on July 1.
    Sitka Sen. Bert Stedman said Southeast did well under this round of reductions, but the state as a whole faces tough challenges ahead.
    “We’ll have to wait and see how things are implemented,” Stedman said. “I want Southeast to be fairly treated and in saying that I want this budget, the burn rate, to be slowed down because we’re quickly moving to a place where it’s permanent fund versus payroll.”
    The final hangup in the budget process related to honoring a previously negotiated $30 million pay increment for state workers. Stedman said part of the reason the budget passed was that the Senate majority finally signed off on that by reasoning that the money could be made up in future years. A little over a week ago the House passed a version of the budget very similar to the one that was approved Thursday. Stedman said he and other members of the Senate majority were not in favor of holding up the budget through July, which would have triggered massive layoffs.
    “There was a less than unanimous position in the Senate majority to hold the line until the bitter end,” he said.
    Passage of the budget concludes the second of two special sessions that carried the budget process nearly eight additional eight weeks beyond the end of the regular session April 30. By that time the Legislature had passed a $5 billion budget with only $2 billion in funding. The Senate could not get the required super majority votes for a draw-down on the state’s rainy day fund, referred to as the Congressional Budget Reserve.
     Sitka Rep. Jonathan Kreiss-Tomkins said the House used the CBR vote as leverage to restore cuts made by the Senate.
    “Initially, the Senate wanted to take a huge cut, like a meat clever, to the education funding, and that looked apocalyptic for school districts who were trying to fund their budgets for next year,” Kreiss-Tomkins said.
    That cut was to the Base Student Allocation, which awards per-pupil funding to state schools. It was a reduction of over $40 million to Alaska schools that would have cut funding to the Sitka School District by $557,364. While forecasting next year’s budget, Sitka School Board members estimated they’d get  $200,000 of that money back when the final budget was passed. Having the cut fully restored means the district will take in over $300,000 more than it anticipated.
    “We’re ecstatic,” School Board President Lon Garrison said. “That’s really good news. Of course, when we went through the budget process we were anticipating that might not come through – that it would be greatly reduced or not there at all.”
    Unless the board decides to consider otherwise, that money will go into the district’s reserve accounts, giving a savings of around $1.3 million. The district cut three full-time teaching positions for next year as well as support to other programs, but Garrison said he expects that money will stay in reserves given the challenges ahead.
    “We’ve already built our budget on what we’ve anticipated we would get. We’ve already made the cuts and moved teachers around,” he said.
    Stedman said cuts will continue to get worse because for all the time the legislators spent on the budget, they didn’t cut much.
    “The number I’m looking at here is only a reduction of $144 million to the operating budget,” Stedman said.
    The overall cuts total over $700 million but, Stedman said, “You just gotta remember that $500 million of it rounded off is in the capital budget, and the capital budget’s not the problem.”
    Cuts to the operating budget amounted to less than 3 percent, and Stedman says the longer the state operates in its current mode, the harder it will be to make those cuts later.
    Kreiss-Tomkins said there needs to be a drastically different approach next year if legislators want to avoid spending a lot of time to accomplish very little.
    “If anyone thinks this process has worked well, they’ve been living on Pluto,” Kreiss-Tomkins said. “It can and must be better next time.”
    “If conversations and negotiations are not happening on a regular basis, it’s no surprise that compromise is not going to happen,” he said.
    Stedman said Gov. Bill Walker is going to have to lead the charge on reductions, as he did this year, but Stedman’s hope is that the Senate will be better able to work with the administration in the sessions to come.
    “The budget reductions are going to have to be led by the administration, and the House and Senate are going to have to work with him,” Stedman said. “You can’t get too far out in front of the other two, being the House and the governor.”
    Additional cuts that were restored in the final budget agreement included over $1 million to the Alaska Marine Highway and $250,000 to public radio support. City Administrator Mark Gorman said it’s good news for Sitka.
    “We’re encouraged that the ferries aren’t going to be shut down and that the school funding formula is complete,” he said. “I certainly thank our representatives, Jonathan Kreiss-Tomkins and Bert Stedman for advocating on behalf of the community.”
    The City Assembly is adding an additional $1 million of support to Sitka Schools because of the budget cuts. Gorman said there has been no discussion on if that would change given the passing of the state budget. He said that conversation would be one for the Assembly. 
    One measure that hasn’t gone through is Medicaid expansion, which Kreiss-Tomkins and Stedman are still pushing for.
    “We need to implement it and we need to implement the cost savings with it, which will help our hospital in particular,” Stedman said.
    It’s possible Medicaid expansion could be achieved through other means, such as administrative action.
    “There are other ways to achieve Medicaid expansion this year and I expect it to happen,” Kreiss-Tomkins said.
    In fact, Kreiss-Tomkins said, he’s looked into the legality of passing Medicaid via a ballot measure and thus “bypassing the legislative branch and taking it straight to the people.”
    “Medicaid expansion is the right thing to do, and I’ll be out there gathering the signatures myself if it comes to that,” he said.
    Stedman said those funds are crucial to hospitals around the state. For now the senator is focusing on ways to make more meaningful cuts to the state budget. He said cost increases are already in place that will push the state expenses up $200 million next year.
    “We needed substantially more reductions in this year’s budget,” he said. “Next year we need to cut $200 million just to stay even.”
    So while, for now, the pink slips are on hold and the ferries have the go-ahead to run, next year will likely bring more of the same battles amongst legislators.    
    “Democratic politics is messy and we will definitely have a few years of it ahead,” Stedman said.