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House Approves $9.5 billion FY 2013 Statewide Operations Budget (HB284/285)

HB 284 holds agency growth to 3.4%, spends $77.7M less than Gov’s proposal


Thursday, March 15, 2012, Juneau, Alaska – The Alaska House of Representatives today passed the Fiscal Year 2013 statewide operating and mental health budgets (HB 284 & 285), moving the legislature one step closer to satisfying its only constitutional obligation and following the House Majority Caucus’ guiding principle to control budget growth.

The House Finance Committee version of the budget slows state agency growth by more than half, from 7.8 percent historical growth down to 3.4 percent. It responsibly invests $9.49 billion in state, federal and other funds in education, healthcare, resource development and public safety.

The funding breakdown is $6.27 billion in state general funds, $2.01 billion in federal funds and $1.21 billion in other funds.

House Finance Committee Co-chair Bill Thomas, who is in charge of leading the House operating budget writing process, says the committee took a new approach to the budget to help better focus subcommittees on holding departments accountable for the dollars invested in them. “This budget is the first in our revamped subcommittee process and we did a good job making tough choices to hold government growth down,” Thomas, R-Haines, said. “Our investment decisions are driven by a few huge components: health, education and transportation, which account for $4.5 billion of expenditures themselves. Our Caucus priorities of fiscal responsibility, responsible resource development, access to affordable energy, excellent schools and workforce development and safe and healthy communities will continue to guide our investment decisions going forward.

“K-12 education alone is 24 percent of our general fund budget. Pupil transportation and our foundation formula account for $1.13 billion,” Thomas said. “We’re putting an additional $329 million towards teacher retirement, up more than $76 million from the current year. In total, it’s a $1.529 billion general fund package which demonstrates our strong commitment to education.”

Targeted investments added in the Finance version include: $3.9 million to the Dept. of Natural Resources improve permitting functions and $3.2 million more for gas pipeline work; roughly $2.3 million to the Dept. of Fish & Game for Chinook salmon, Tanana River, Cook Inlet, and Southeast Alaska projects to help better manage our fisheries; $60 million for community revenue sharing; and, $400 million for the oil and gas tax credit fund.

Thomas said the House budget saves $31 million in general funds, and $77 million overall, compared to the governor’s amended proposal. “It still invests $9,497,328,000 in state government services that Alaskans desire,” Thomas said. “If each Alaskan worker were required to pay an equal share, it’d cost them $18,614 apiece. We all know that’s not going to happen, but it’s a good way to continue to drive home the cost of government when Alaskans consider which programs and services matter most to them.

“This is a responsible budget that meets the needs of Alaskans while keeping an eye to the future,” Thomas said. “If we let the historical annual budget growth of 7.8 percent continue, and our price and production of oil forecasts are accurate, we would have budget deficits in two years. We cannot allow that to happen.

“We cannot afford to be everything to everybody,” Thomas said. “We need to continue to find ways to make government as efficient and effective as possible and I’m proud that we’ve held agency operations growth down to 3.4 percent.”

Finance Co-Chairs Thomas and Bill Stoltze said the details of a savings component still need to be worked out with the Senate. “We will work with the finance co-chairs and both leadership groups to come up with a savings plan for the projected surplus of $2.3 billion in FY12 and $1.7 billion in FY13,” they said. “We still have the capital budget to work on, but we are committed to saving a large portion of the projected surpluses.”

Thomas thanked the budget subcommittees for their work, and noted that the budget was a collaborative effort between the Majority Caucus and Minority Caucus members on the committee.

State statute requires that mental health funding be presented in a separate appropriation bill, making it easier to track what funds the state invests in that area. So what you see in HB 285 is all general fund/mental health (GF/MH) and Mental Health Trust Authority Authorized Receipts (MHTAAR) investments in mental health programs and Mental Health Trust Authority operations that are also carried in HB 284. All mental health spending is accounted for in the operating budget reports prepared by the Legislative Finance Division.

HB 284 & HB 285 now move to the Alaska Senate for consideration.

Rep. Thomas Floor Speech (pdf)

FY13 Operating Budget Agency Summary (pdf)

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