Passes Smallest Supplemental in Recent History
Solves Immediate Cash Flow Crunch
Juneau -- Making good on their commitment to reduce state spending and to solve the immediate cash flow crunch due to low oil prices, the Republican-led Senate today reduced the Supplemental Budget to $13.2 million, one of the lowest in recent memory. The Senate version of House Bill 100 passed by a vote of 17 to 3.
The measure shaves more than $10 million from the administration's initial request. It also increases the legislative cap on the State's Savings Account from $700 million to $900 million - an action necessary to help cover the shortfall in the state's budget caused by decreased oil prices and production.
"We were able to reduce the budget, yet still meet the needs of Alaskans," said Senator Sean Parnell (R-Anchorage), Co-chair of the Senate Finance Committee. "This supplemental budget is a good, workable, package. Every place we can save money helps us address our $1.2 billion fiscal gap."
The Supplemental Budget is used for unanticipated expenses. In February, Governor Tony Knowles submitted a $23 million supplemental budget. Last year, the Legislature planned for a $16.5 million supplemental. The Senate's version at $13.2 million came in under that projection by over $10 million.
"We worked through the Governor's original supplemental request and found items that were not necessary or were largely over-funded," said Senator John Torgerson (R-Kasilof), Co-chair of the Senate Finance Committee. "Each dollar spent in the Supplemental Budget is one dollar out of the State's savings account. By tightening the strings now, we'll have more money and more flexibility to shape a long-term funding solution later."
Senate Republicans voted to increase the legislative cap on the Constitutional Budget Reserve, the State's Savings Account, from $700 million to $900 million. This funding allows the State to continue funding programs and services through May. Additional funding may be required to see the State through the rest of the fiscal year.
"We chose to keep the pressure on the Democratic Leadership for more current year budget cuts rather than writing them a 'blank check'," said Senator Parnell. "By encouraging more belt tightening now, we will lessen the total amount needed to continue state operations through the end of the fiscal year in July."
"The Governor has come forward with $6.2 million in cuts to the current budget so far," said Senator Torgerson. "We need to see the details of those cuts and make sure the administration continues to work on further reductions for not only this budget year, but for next year's budget also."
= John Torgerson, 30 K = Sean Parnell, 24 K