An account set up to hold funds for the Alaska’s schools could be drained by the end of next year if the state budget remains as it is.
There’s currently about $1.3 billion in the savings account, which gives school districts some security year to year. But with the State facing a $3.5 billion deficit this year, that fund would be emptied to close the gap.
With a similar deficit predicted for FY16, lawmakers will need to find additional funds to keep the state’s financial wheels turning.
In the State Senate, the Republicans control 75% of the body, enabling them to pass a measure to dip into the Constitutional Budget Reserve to the tune of $3.2 billion. In the House, Republicans are 7 lawmakers shy of the 3/4 rule. Without a compromise on education funding and Medicaid, minority Democrats say they won’t support the measure.
Republicans say they had little choice after oil prices fell steeply last year. They insist the drop in education funding isn’t a true cut, since it reverses the increases which were approved during last year’s session.