Dan's Dispatch

Last week, the Alaska State Legislature passed time-sensitive legislation to cover funding shortfalls for vital state services, including the Alaska Marine Highway System and Medicaid. The House voted for the “Fast-Track” Supplemental Budget, HB 321, last Monday with 32 in favor and 7 opposed. On Friday, the Senate followed suit and passed it with a vote of 16 to 1.

HB 321 includes $24 million for the Alaska Marine Highway System to keep it operating through spring. The AMHS did not receive the total amount of funding they expected for Fiscal Year 2018, causing a shortage of funds. Without the funds, the AMHS would have had to shut down ferry service through mid-April. Ferry service is already restricted; we have seen the impact of less frequent routes, whether it is transporting students to school related events or transporting goods across Southeast. Having no ships running in spring would have been detrimental to our economy and way of life. With the passage of HB 321, we can continue reaping the benefits of a working ferry system.

Another important item in the supplemental bill is $45 million for Medicaid. Representatives from hospitals in both Ketchikan and Wrangell contacted me to describe the impact of insufficient funds on local hospitals. Without Medicaid funding, they warned me that hospitals would face “missed payroll and vendor payments or even facility closures” that would “seriously impact the community.” Fortunately, HB 321 averts the near-term crisis.

It’s worth noting that despite the rise in Medicaid enrollment, the state funding has not increased in tandem. Since 2015, Medicaid enrollment has grown by 33.7%, likely due to Alaska’s ongoing recession. The Unrestricted General Fund (UGF) expenditures in the Department of Health and Human Services have actually decreased in the last three years, largely due to the ability to leverage federal funds.

Overall, the “fast-track” supplemental budget totals $110.2 million, of which $92 million is State Unrestricted General Funds. It provides essential funding for AMHS and Medicaid, plus funds to the Department of Corrections to cover higher than anticipated numbers of inmates and associated health care costs, management fees for the Permanent Fund, the Community Assistance Fund, and the Alaska Disaster Relief Fund.