The Senate Finance Committee began digging into Gov. Bill Walker’s budget plan Wednesday, grilling Walker’s budget director on details and underscoring the challenge ahead in addressing the state’s budget deficit.
Committee members questioned budget director Pat Pitney on the level of cuts; whether the state has truly saved money with Medicaid expansion – she said yes; and on Walker’s budget plan being built around assumptions not signed off on yet by lawmakers.
There’s no clear consensus from legislators on a way forward. While some legislators are calling for deeper cuts, there are concerns about the impact those cuts could have on the economy.
Walker’s budget plan includes elements from his proposal to “re-plumb” funding for state government by putting oil tax revenue and a portion of resource royalties into the permanent fund. He is proposing beefing up the earnings reserve through a transfer from savings and, according to the latest bill draft, allowing for an annual draw starting at up to $3.3 billion from the earnings reserve to help finance state government.
Senate Finance Committee co-chair Pete Kelly, R-Fairbanks, said that just because there are certain assumptions built into Walker’s budget plan doesn’t mean that’s how things will end up as lawmakers get involved. Walker included pieces of Medicaid expansion in his budget proposal last year. Those were stripped out by lawmakers who tabled the issue of expansion for further review. Walker went ahead and expanded the program on his own, drawing a legal challenge from a committee comprised of House and Senate legislators. Arguments in that case are scheduled for next month.