House Finance adopts committee substitutes updating FY26 operating and mental-health budgets

The House Finance Committee adopted committee substitute 1 (CS1) versions of House Bill 53, the FY26 operating budget, and House Bill 55, the mental-health budget, during its March 12 meeting in Juneau.

Committee staff member Alexander Schroeder told members the CS1 documents incorporate subcommittee recommendations and a set of technical and governor-proposed amendments. Schroeder said the statewide total in the combined CS1 for operating bills is $14,557,770,900, with an unrestricted general fund total of $7,508,463,300 and federal receipts of $4,077,298,000. He said the change from the government draft to CS1 produced a statewide total increase of $44,993,900 (about 0.3%).

The committee removed a provision that would have given the Office of Management and Budget transfer authority of up to $5,000,000 within departments in order to address facility operations and maintenance. Schroeder said that language, which cited Alaska statute 37.07.020(e), had been removed because it would have undermined the legislature’s intent that appropriated facility funds be used for facilities and maintenance. "If the language we removed in this committee substitute had remained in the bill, it would undermine the legislature's intent," Schroeder said.

Schroeder briefly reviewed other CS1 changes: deletion of a section on job reclassifications that would have required departments to absorb those costs (allowing departments instead to pursue supplemental requests if needed); a placeholder for Department of Agriculture line items pending executive action; a governor amendment reauthorizing multi‑year appropriations; and extensions to last year’s fisheries disaster relief spending window. He also described language additions and technical fixes affecting actuarial treatment of the AlaskaCare employer contribution rate, power cost equalization references, and several statutory designated-program receipts and account totals.

Staff and members discussed several line items Schroeder flagged as potentially in flux, including a proposed reappropriation from an emerging energy technology fund that staff said may no longer exist and a governor amendment to reauthorize funds for Alaska Pioneers’ Homes. Schroeder said the drafters had adopted amended language where possible and noted the committee substitute would be the working draft going forward.

Committee chairs then moved and adopted CS1 for each bill as the committee working document. The transcript records motions to adopt CS1 for House Bill 53 and for House Bill 55; committee chairs removed objections after staff explanation and CS1 versions were made the working drafts for further hearings and testimony.

Why this matters: The CS1s set the finance committee’s working versions of the two largest operating bills the committee will consider and reflect subcommittee decisions and negotiated technical edits. Changes such as removing OMB transfer authority and the job-reclassification provision alter how departments will be expected to manage facility funding and personnel cost pressures; other edits establish multiyear spending windows and technical formula fixes that determine appropriation amounts.

Staff said the CS1s will go forward for public testimony; the committee adopted CS1 for HB53 and HB55 as its working documents for further hearings and fiscal review.