Walker proposes $65 million supplemental budget to cover extra costs for the current year

Gov. Bill Walker has proposed a $65 million supplemental spending bill, including $50 million in unrestricted general funds.

The supplemental budget is intended to cover unanticipated costs for the current fiscal year, which ends June 30. Details on Walker's budget plan for next year are expected Thursday.

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Alaska faces multibillion-dollar budget deficits for this year and next amid a crash in oil prices. While the state plans to dip into savings to get by, Walker and lawmakers have been bracing the public for cuts.

Spending levels and oil prices will dictate how long reserves last.

In an email to state employees Wednesday, Walker said the fiscal situation "necessitates that we take swift action to trim spending and reduce the footprint of state government to a sustainable level."

He said his budget proposal for next year includes staff reductions "and will initiate a challenging, but necessary, discussion among Alaskans."

The supplemental proposal for this year includes Walker's previously announced plan to cut $52 million in one-time education funding approved during the last session for fiscal years 2016 and 2017.

That helps offset $92 million in extra expenditures related to accounting issues for advance payments to providers stemming from Alaska's problem-plagued Medicaid payment system.

The budget released on the Office of Management and Budget website Tuesday also includes about $785,000 for the Alcoholic Beverage Control Board, which is charged with writing regulations for the implementation of legalized marijuana in Alaska, and a proposed re-appropriation of $3.2 million left from completed projects to a fund used for cleanup of contaminated sites, nonemergency spill response and other activities, which faces a shortfall.