Lawmakers Strike Budget Deal

The Alaska House and Senate have reached a deal on the state’s operating budget.

For weeks, the two bodies have been at an impasse over whether to fund cost-of-living raises for public employees. House Democrats argued that the state should not go back on its contract with state workers, while Senate Republicans held that it was inappropriate to grant them a pay increase when the state faces a multi-billion-dollar deficit. The House’s Republican majority acted as a go-between.

The stalemate appeared to end on Wednesday night, when a conference committee between the two bodies agreed to pay for the contracts this year, but placed limits on future increases. Their bill instructs the governor to keep salaries flat when bargaining with the public employee unions, and has a clause that allows contract negotiations to be reopened if oil goes above $95 per barrel or drops below $45 per barrel.

The committee directed Gov. Bill Walker to cut $30 million in agency operations at his own discretion as a way of offsetting the cost-of-living increases.

The compromise also adds $16 million in formula funding for schools, as well as some additional money for early education , the ferry system, senior benefits, and the Office of Children’s Services.

As the result of the deal, Democrats in the House Minority have agreed to support a withdrawal from the state’s rainy-day fund to pay for the $5 billion operating budget. A three-quarter vote is needed to access the Constitutional Budget Reserve.

The House and Senate have floor sessions scheduled for Thursday morning, and a spokesperson for the House Majority say a vote on the budget is anticipated.