With Budget Negotiations Stalled, Republicans Consider Partially Funding Government

The Legislature has now gone five days past its statutory deadline, and still an agreement on the budget has not been reached.

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Negotiations on whether lawmakers will tap the constitutional budget reserve — a $10 billion rainy day fund — have gone slowly. A three-quarter vote is needed to access the fund, and the House’s Democratic minority has made their support conditional on a few priorities, like increased education funding and Medicaid expansion.

The Republican majorities in the House and Senate are now considering ways to avoid that vote. House Speaker Mike Chenault says that the Legislature may be able to pay for government through October using revenue anticipation bonds or existing pots of money, like the power cost equalization fund. The Nikiski Republican adds that Gov. Bill Walker is not supportive of that plan.

“That’s not an option the governor really wants to see is us leave without a CBR vote,” says Chenault. “If he would like to help and from his position to get a CBR vote, we would probably accept that.”

As of Friday afternoon, a deal was still out of reach. Gov. Walker, the House Speaker, the Senate President, and the House Minority Leader were all planning to meet in the same room for the first time since negotiations began. Even if they come to an agreement, Chenault cautions that an adjournment today is unlikely.

“You know, can we get that done in a day? Yeah, if everything went good,” says Chenault, noting that logistical delays could occurs.

The biggest hold up is a $47 million cut to school funding, made by the Senate. The Senate stands by that cut, while House Democrats would like to reverse it. House Speaker Mike Chenault says his caucus also believes that it goes too deep.

“So, if we have to be hung up on an issue down here, I think education is a worthwhile issue,” says Chenault.

Meanwhile, House Democrats are not on board with the plan to gavel out and circumvent a vote on the constitutional budget reserve.

“I don’t think we should take a vacation. I think we should have gotten this done in 90 days,” says Rep. Les Gara, an Anchorage Democrat. “But since we couldn’t get it done in 90 days, we need to still try and work together to protect public education, to pass things that would save the state huge amounts of money, like the $600 million we would save with Medicaid expansion.”

If the vote to access the CBR does not happen, the legislature may have to hold a special session later in the fall to avoid a government shutdown when funds run out.

Correction: An earlier version of this story described the governor as supportive of the plan to fund government through part of the year, when the word “not” was omitted in error.