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House Finance advances spending plan with contingencies for school, contract money

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JUNEAU, Alaska — The House Finance Committee advanced a state spending plan Wednesday that seeks to dial up pressure on minority Democrats to end a long-running impasse over the budget.

But minority members bristled at the proposal, and a co-chairman of the Senate Finance Committee said he thought it could be a hard sell on that side.

The proposal addresses two minority priorities — full funding of the per-student funding formula for the fiscal year starting July 1 and honoring cost-of-living increases in union contracts — but it comes with strings. The funding would be contingent upon a three-quarters vote being obtained to access the constitutional budget reserve to cover costs. The failure of the House to secure the needed 30 votes to tap the reserve resulted in the passage last month of a partially funded budget that was largely rejected by Gov. Bill Walker.

Under the plan unveiled Wednesday, union increases additionally would be contingent upon Walker vetoing legislation that repeals cost-of-living increases for workers not covered by unions. Raises for both classes of employees would then be funded.

But if the three-quarters vote fails, there would be a $16.5 million cut in school funding, in line with the version of the budget that passed in April, and the pay increases would not be funded.

The administration would see a $29.8 million cut to distribute as it sees fit regardless of what happens with the reserve fund vote. Walker's budget director, Pat Pitney, told the committee, meeting in Anchorage, that this would add to the number of position losses and layoffs the state already is facing amid budget cuts.

Senate Finance Co-chairman Pete Kelly, R-Fairbanks, said in an interview that it's bad policy to hand out raises when the state is facing multibillion-dollar deficits. The Republican-led Senate in its previous actions saw it as more compassionate to protect jobs than to provide raises, he said.

If lawmakers are not strong enough or level-headed enough to decline providing pay increases at times like this, "then I've got to conclude we are incapable of handling this money problem that we have," Kelly said.

House majority leaders said the proposal addresses two of the big points raised by the minority during budget negotiations. House Majority Leader Charisse Millett, R-Anchorage, told reporters nobody will be happy with the budget but the plan laid out is an offered compromise.

"I hope the minority doesn't vote against education and union contracts," she said.

Republican legislative leaders have already indicated they do not intend to take up another big issue for the minority, Medicaid expansion, at this point, saying the issue needs further review. House Minority Leader Chris Tuck, D-Anchorage, said Tuesday that expansion remains important to his caucus.

Democrats also have unsuccessfully pushed to have $32 million in one-time school funds, outside the funding formula, for the coming fiscal year restored. That money was approved last session but repealed this year by lawmakers, who said the state's circumstances have changed. That cut was first proposed by Walker.

Rep. Les Gara, D-Anchorage, said the House Finance proposal fails to honor the promise of one-time school funding made last session and is "a welcome mat for a recession" with the additional possible layoffs.

One apparent victory for Democrats, an amendment that in part would have provided funding for additional social workers within the Office of Children's Services, was snatched away when the committee, upon returning from a break Wednesday evening, rescinded its action to adopt the amendment. There was no discussion as to why the action was taken and no explanation offered when Gara, who led the charge on the amendment, sought an answer.

Separately pending is legislation that would authorize use of an accounting maneuver to allow lawmakers to tap the reserve fund with a simple majority if the three-quarter vote fails.

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