House Finance hears OMB overview of governor’s FY27 amendments as officials flag $467M in operating supplementals
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Summary
OMB director Lacey Sanders told the House Finance Committee the governor’s amended package includes roughly $467 million in operating supplementals and a proposed FY27 deficit of about $1.6 billion; major asks include DOC shortfalls, a second tranche of rural health funds, SNAP administrative costs and a $43.7M fire‑fund deposit.
Lacey Sanders, director of the Office of Management and Budget, told the House Finance Committee on Feb. 19 that the governor’s FY27 amended budget package and related supplementals show “the overall deficit… is $467,000,000 and the fiscal year 2027 proposed deficit at this point to be drawn from the constitutional budget reserve fund is $1,600,000,000.”
The presentation listed a mix of operating and capital requests. On the operating side, OMB highlighted a $20 million Department of Corrections request (facilities and inmate transportation) and a $3.1 million supplemental for inmate health care aimed at ensuring 24‑hour medical coverage in institutions. For the Department of Health, Sanders said the package includes a $272 million second tranche for rural health transformation funds covering FY27–FY29 and an $8 million general fund request tied to a federal change in SNAP administrative cost‑sharing. The Division of Public Assistance also faces continued costs for multi‑year eligibility systems and an $8 million component for a virtual contact center. OMB added $1.67 million for the village public safety officer (VPSO) program to retain officers and fill seven vacancies.
On capital items, Sanders described a $22.5 million set of amendments that include an $8 million allocation of Alaska Housing Finance Corporation dividend funds for a statewide housing development and access program, $7.6 million for armory deferred‑maintenance work, $4.5 million for permitting modernization in DNR and smaller safety and aircraft projects for the Alaska State Troopers.
Sanders called particular attention to the fire suppression fund, saying the governor’s package includes a $43.7 million deposit “in addition to” two interim disaster declarations totaling $55 million; OMB characterized the combined need at roughly $98 million once prior‑year obligations and spring‑season preparation are included. Committee members compared the governor’s numbers to HB 2 89, the legislature’s supplemental bill debated earlier, and noted the legislature had added items and headroom not reflected in the administration’s totals.
OMB flagged that many of the governor’s FY27 requests mirror supplementals already discussed during the session and that more amendments could be brought forward as agencies send updated needs. Sanders told members OMB will continue to present items to the committee as they are identified.
The committee did not take formal votes on any of the items during the meeting. The hearing concluded with OMB scheduled to return with additional details and with agency subcommittees to consider the FY27 requests.
