Where's the money?
The response to the current public health emergency is evolving fast. Like, almost daily. The governor’s been issuing regular public health mandates and advisories. (Please follow them!) Slowing the virus' spread gives us time to ramp up emergency readiness and ensures we have the hospital beds we need for the few who get really, really sick.
We also have to respond to the economic impacts. The budget has a lot of moving pieces right now: the regular operating budget, the capital budget, the supplemental budget, the PFD, and the governor's newest emergency economic proposals. So what's the latest?
Early this week, we passed a supplemental budget the includes money for Medicaid and COVID-19 preparedness. It also covers last summer's wildfires and some desperately needed ferry money. But it hit a glitch. Some of the money is funded from the state's last savings account, the Constitutional Budget Reserve. That takes a three-quarter vote in both bodies to use. The bill passed unanimously in the Senate, but the House was two votes shy of the 30 they needed. That same vote also dealt (or should have dealt) with the 'reverse sweep' that got weaponized for the first time last year. Stay tuned for how we get that all fixed.
We’ve been working all weekend to get the Senate's version of the operating budget finished and back to the House. We'll take up amendments on the Senate floor tomorrow. For a budget that started from last year's brutal cuts, it's not wildly worse. It fixes ferries (both boat repair and getting them back on the runs,) moderates the governor's damage to the university, and restores public broadcasting.
It cuts K-12 education though. $30 million below last year. Expect us to work on that – and the PFD – Monday on the floor.
So, how to pay for it? With oil prices in the tank and the stock market down the drain, our revenue picture is an 8x10 color glossy photo of a dumpster fire.
We may get some help dealing with virus expenses from the federal government. But we can't rely on the feds alone. There isn't much left in the CBR and this is the worst possible time to take extra money out of the Permanent Fund. Drawing more than the long-term sustainable amount when the market is down will torch a lot of the value our grandkids need from the fund.
Alaskans deserve a PFD we can count on. Our fiscal pinch means it won't be as much as we want. The rush to end this year's session means the uphill battle to broaden Alaska's revenues is all but lost until next year.
Like I said, this is all moving fast. I’ll update you with more soon.
