The Capitol Report: Governor, legislators negotiate

May 27, 2015

University Relations

By Chris Christensen
UA Associate Vice President for State Relations

The operating budget bills (HB 72 and HB 73) passed the House and Senate during the regular session on April 27 and were transmitted to the governor on May 1. The budget proposed spending $5 billion, but the state is only expected to receive $2 billion in revenues. To make up the $3 billion difference, the legislature needed to withdraw funds from the Constitutional Budget Reserve. The CBR is a savings account that requires a three-quarters vote of the House and of the Senate to access, rather than a simple majority. The Senate was able to attain a three-quarters vote, but the House was not; members of the House minority refused to provide the votes needed to reach three-quarters. This meant that the budget that was passed was not fully funded, and the money to pay for state government operations would run out sometime in the late summer or early fall. There was an expectation that the legislature would call itself into special session later in the summer, to try again to get the three-quarters vote.

Instead, Gov. Walker called the legislature into its first special session on April 28 to address the underfunding and several other significant policy issues. Public hearings and private negotiation have been taking place since then, in an effort to attain the three-quarters vote needed to fully fund the operating budget.

On May 19, 2015, Gov. Walker vetoed most of the FY16 operating appropriations contained in HB 72. He reduced the budget to the $2 billion level to match available revenues and focused available state funding on health, life, safety and debt service obligations. The impact to the University of Alaska was a state appropriation reduction of $242.5 million from the amount included in HB72. This is a reduction of approximately 72 percent.

During the current special session, the legislature is considering bills that would add the vetoed money back to the budget, as well as negotiating to get the three-quarters vote needed to fully fund these add-backs. No one knows when these issues might be resolved.