June 19, 2017

By Miles Baker
Associate Vice President Government Relations

Good afternoon. I hope everyone had a good Father’s Day weekend.

Today is the 4^th day of the second special session of the Alaska Legislature. The House and Senate have now been in session for a combined total of 154 days. Reliable sources tell me this is the fourth longest session in history, the record having been set in 1981 at 164 days. Tip of the hat to former legislative aide Chris Clark.

As most of you may know, the House and Senate were unable to resolve their differences by last Friday’s 30-day deadline, so both bodies adjourned the 1^st special session “sine die”, or in layman’s terms, without plans to resume work. But resume they must as the state’s 2018 fiscal year begins July 1^st, less than two weeks from now. If an operating budget hasn’t passed by then, state agencies have no spending authority to continue normal operations and will have to begin reducing or shutting down operations.

Following the Legislature’s adjournment on Friday, Governor Walker immediately called legislators back into a second 30-day special session to continue working on the budget impasse. Everyone’s immediate concern is the impending July 1^st operating budget deadline. This time, the governor limited the call to the original operating budget bill, HB 57. In his comments accompanying the call, the governor left open the possibility of adding other issues to the session call, but not until the Legislature comes to agreement on the operating budget. As we’ve discussed in prior updates, there are a number of other unresolved policy issues that are important to the long-term financial health and stability of Alaska: an FY18 capital budget, opioid prescription controls, Permanent Fund restructuring, oil tax credits, and potential broad-based tax proposals.

So where does this leave the University of Alaska?

Well, when the House and Senate gaveled back in Friday to start the new session, they passed Senate Concurrent Resolution 201, which allows them to pick up the operating budget negotiations where they left off. Had they not passed that resolution, HB 57, the current operating budget bill, would have died and the Legislature would be required to start the process all over again with a new bill. By passing SCR 201, the operating budget conference committee negotiations can resume where they left off. So, from a technical perspective, the university’s budget is still in conference between the Senate’s number of $303 million and the House’s number of $325 million – a $22 million difference in unrestricted general funds. However, as University of Alaska President Jim Johnsen indicated to employees�Friday afternoon, the House passed a version of the FY18 capital budget (SB 23) immediately before adjourning Thursday night that included a $317 million operating budget appropriation for the university – a number $8 million below the current year’s $325 million spending level the House has supported up to this point. You can view 360 North’s coverage of Thursday’s House floor debate on the capital budget bill here. You can view a report summarizing what would have been the impacts of the House floor amendment to the capital budget here. Although this version of SB 23 died when the 1^st special session ended Friday night, that late evening action is not a good harbinger for where private budget negotiations may stand between the two bodies. Were the $317 million number to reappear during the next several days, it would represent a $61 million (16%) general fund reduction to the university over the past 4 years.

Today, both bodies held brief technical floor sessions and are now adjourned until Thursday, June 22. An operating budget conference committee meeting has been noticed for 3 p.m. tomorrow afternoon. The Legislature is still under the 24-hour rule, so once agreements are reached the process can move relatively quickly.

I will do my best to keep you informed of any new developments as they occur. Thank you for your continued support of the University of Alaska.

For more information, contact Miles Baker at miles.baker@alaska.edu or visit www.alaska.edu/state.