Alaska officials: Budget error could shut down ferry system

A legislative mistake might mean the state ferry system will have to shut down in the spring, Alaska officials said.

The Alaska Marine Highway lost its allocated $30 million for the year due to an unforeseen error in the state's supplemental budget, The Juneau Empire reported Wednesday.

The 2017 budget had special language specifying the marine highway's funding would be cut if the supplemental budget needed more than $100 million and that happened.

The Legislature uses the supplemental budget as a safety measure to cover money the state has already spent. It's an ordinary action, but for the past few years, the state has been using the supplemental budget as a tool to make budget cuts appear larger, according to the Juneau Empire.

To make the fiscal year 2018 budget appear smaller, the Legislature shifted some spending into 2017. It did the same last year as well.

"It's like spending more than you make from their checking account, but to fill in the gap, they made a transfer from savings to checking," said Brian Fechter, an analyst for the Alaska Office of Management and Budget. "Except the transfer to checking never happened."

'There was no way to react'

Pat Pitney, director of the state Office of Management and Budget, said the Legislature did not know about the problem before the budget was signed into law.

"I think because those final things were done so late, there was no way to react to a problem," Pitney said. "We didn't know that we were going to threaten the $100 million limit because there wasn't that many supplementals in that list."

State Sen. Bert Stedman, a Republican, said the marine highway will run out of money in April.

"They will not have the authority to run the system if the Legislature does not provide the money, period," Stedman said.

Gov. Bill Walker, an independent, is expected to ask the Legislature for supplemental funding to avert a shutdown.

Rep. Paul Seaton, a Republican, who was in charge of the House side of the operating budget, and Sen. Lyman Hoffman, a Democrat, who was in charge of the Senate side, were not immediately available for commenton Wednesday.