Committee sends budget to full House

Rep. Paul Seaton, R-Homer, (center) chairs the House Finance Committee shortly before the body passed it’s version of the state budget March 10, 2017, to the House of Representatives. (Photo by Skip Gray/360 North)

The House Finance Committee has proposed cutting $31 million from the state budget.

Listen now

That’s a little less than 1 percent of the annual amount the Legislature directly controls.

As the full House considers the spending plan next week, clear differences have emerged over whether those cuts are deep enough.

The budget is similar to the one proposed by Gov. Bill Walker.

Most of the changes that the House Finance Committee made were to areas outside of the agencies that provide government services.

For example, the committee’s proposal includes a $37 million cut to oil and gas tax credits.

Committee co-chairman Paul Seaton noted the Legislature has already cut hundreds of millions of dollars from state agencies over the last few years.

Seaton is a majority-caucus Republican from Homer.

“When you go in and try to nickel-and-dime agencies and pull threads out of the fabric, all of a sudden, you just make so the agencies can’t work to deliver the service that people want,” Seaton said.

The Department of Transportation would see the largest cut. Education and Early Development would see the largest increase.

Finance Committee member Cathy Tilton, a Republican from Wasilla, said the cuts don’t go far enough, at a time when residents are looking at cuts to their Permanent Fund dividends.

“What I’m hearing from my constituents is that they wanted to see some true reductions in agency operations,” Tilton said. “And there was none of that.”

Tilton also said the committee shouldn’t have increased funds to areas like the Alaska Marine Highway.

“There are a lot of things that we wish that we could do,” Tilton said. “When you have dollars in your budget, and in your home budget, you’re able to do more things. But when you’re looking at a $3 billion deficit, you have to take into consideration that we’re not going to be able to do all of things that we did before.”

The Finance Committee minority proposed about $150 million in cuts to individual line items, plus another $75 million in cuts to the amount schools receive based on the number of students who attend.

But Seaton noted the minority would actually have increased the budget.

That’s because it wanted to reverse Walker’s veto of half the Permanent Fund dividends paid out last fall.

Some of the biggest differences are over how to handle the Permanent Fund.

The Finance Committee majority proposes drawing $4.2 billion from Permanent Fund earnings this year to fund the budget. Of that amount, $1.7 billion would go to the state’s education fund.

“We’ve passed a fully funded budget for 2018 and out of the House Finance Committee, I anticipate that being fully funded as it leaves the floor,” Seaton said.

The full House is scheduled to debate amendments to the budget on Monday.

Senate majority members have said they want to cut roughly $300 million from the budget.