House Finance Committee adopts committee substitute for FY2027 operating bill after 6–5 vote

The Alaska House Finance Committee on March 11 adopted, by a 6–5 vote, committee substitute version H as its working draft for the FY2027 operating bill, House Bill 263. The committee meeting in Juneau was convened by Co‑chair Josephson at 9:06 a.m., and staff walked members through changes carried from subcommittee close‑out reports.

Alexander Schroeder, staff to Co‑chair Josephson, told the committee that the substitute (HCS 2) combines the operating bill with the mental‑health bill for tracking purposes and carries multiple subcommittee recommendations through to the draft. Key changes Schroeder highlighted include returning several accounting functions to agencies (ending a prior shared‑services consolidation), transferring 57 permanent full‑time positions back to agencies without separate funding attached, moving payroll processing for several departments from centralized Department of Administration handling back to the requesting agencies (including corrections, fish and game, law, military and veterans affairs, natural resources, public safety, and transportation and public facilities), and approval of information‑technology classification study implementation increments.

Schroeder provided fund‑level totals for FY2027 showing net changes between HCS 1 and HCS 2 in agency operations: an increase of $147,728,800 in unrestricted general funds; an increase of $8,123,100 in designated general funds; an increase of $17,584,600 in other state funds; and an increase of $415,289,700 in federal receipts. He also said that, compared with the governor's amendments, HCS 2 shows a $42,778,100 increase in unrestricted general funds and a $256,735,200 decrease in federal receipts, explaining that the governor's Feb. 18 amendments had included roughly $272,175,000 in federal receipts for a health‑transformation fund that is not in the committee substitute because corresponding language was not added.

Members raised drafting and formatting questions about line items and pagination in the work draft. Representative Stapp flagged a figure on page 10 that appears to contain two numbers merged together (an appropriation total and a general‑fund total), and staff said the committee will seek clarification from the Legislative Finance Division when they are available. Representative Stapp also asked about extended intent language on page 14 related to the Office of Children's Services; staff said that language originated in a subcommittee amendment and can be clarified in a future committee substitute.

After Co‑chair Josephson lifted his initial objection for purposes of explanation, the clerk called the roll. The clerk recorded the following votes on adoption of HB 263 version H as the committee's working draft: Representative Jimmy, yes; Representative Allard, no; Representative Stapp, no; Representative Galvin, yes; Representative Moore, no; Representative Hannon, yes; Representative Kamashevsky, no; Representative Bynum, no; Representative Foster, yes; Representative Shroggy, yes; Representative Josephson, yes. The tally was 6 yea, 5 nay; the committee adopted version H as its working draft for the operating budget.

The committee scheduled public testimony on the operating bill (and the mental health bill) at a 1:30 p.m. session the same day, listing multiple communities to be heard and allowing two minutes per speaker for oral testimony. Written testimony may be submitted to house.finance@akleg.gov. The committee will return later in the day to continue listening and receive additional public testimony.