Senate passes $9 billion state operating budget

JUNEAU -- The Alaska Senate passed a $9 billion state operating budget Friday that sets up a political debate on student scholarships and coastal management.

An amendment passed on the floor with little fanfare appropriates $1.1 million to Gov. Sean Parnell's merit scholarship plan. When money is allocated, a governor can move it about; when it's appropriated, he can only do so in limited circumstances.

The Senate Finance Committee had swapped the $8.2 million that Parnell proposed for scholarships, one of his top legislative priorities, with the $1.1 million he proposed for a program for students with unmet financial needs. The switch followed concerns over whether students would have equal opportunities to earn scholarships, and testimony that the AlaskAdvantage needs-based program isn't meeting demands.

The committee also cut $4.6 million and 33 jobs related to the coastal management program. Rural lawmakers want to ensure that local communities have a greater say in state or federal resource development decisions and oppose Parnell's proposal to extend for another six years a program they consider broken.

Parnell doesn't want the one-year extension that some have sought, saying he hopes there can be progress toward a "meaningful extension" during the Legislature's final weeks.

The current program is set to expire July 1.

The scholarship and coastal management issues are among the key differences in the budget plans passed by the House and Senate. The Senate, through a floor amendment, also added $40 million tied to a proposed new revenue sharing program with school districts and local governments. The program, which would be tripped at times of higher oil prices, is aimed at addressing school and municipality concerns with affording high energy costs. Funding is contingent upon passage of the program this session. The bill setting it up passed the Senate Friday and now goes to the House.

The budget passed by the Senate also has $1.4 billion characterized as savings, including $1 billion in general funds that would go into reserves and $400 million for an energy assistance program endowment. Those are supplemental spending items, with effective dates for this fiscal year, and will need to be agreed upon in conference committee.