Parnell wants $160 million for unexpected costs BUDGET: Money would be used for medicaid, nurses and maintaining prisons.

JUNEAU -- Gov. Sean Parnell wants the Legislature to give him $160 million to cover unanticipated costs for state government this year, including money to cover the expense of managing prisons and prisoner health care as the prison population keeps rising.

The money sought by Parnell will also address rising Medicaid payments to Alaskans and a shortfall in dollars needed to pay public-health nurses. The state will have to lay off nurses, close health centers and reduce village visits unless the extra money is provided, according to the Parnell administration.

What else is on the governor's wish list? Bigger payments to the Permanent Fund's outside investment managers as the fund rebounds from the recession. Money to pay for the "round the clock" effort by state attorneys to defend state election officials last fall against U.S. Senate candidate Joe Miller's lawsuits over the state's count of write-in ballots, among other things.

Some legislators said Wednesday that they weren't surprised by the size of the request, unveiled this week, to spend extra money during the ongoing budget year.

"We should just be thankful that out of this budget, 73 percent is federal money that we are appropriating," said Rep. Scott Kawasaki, D-Fairbanks.

But, a couple of them noted that state agencies are routinely underestimating the amount of money they need to operate. Then, they come back to the Legislature with tens of millions of dollars of unanticipated expenses.

Sometimes, those expenses really can't be predicted, but low-balling of some agency budgets "is a systemic issue," said state Rep. Mike Hawker, R-Anchorage, who chairs the House Legislative Budget and Audit Committee.

The request for more money provides a glimpse inside two state programs under stress: the prison system and the Medicaid program for low-income health care.

CROWDED PRISONS

Parnell wants $4.5 million to defray unanticipated expenses from managing the state's prison population, which is growing by 150 to 200 inmates a year.

Prisons in Alaska are straining above capacity and more beds are needed for the growing number of Alaska prisoners incarcerated in Colorado under a state contract, according to the state Department of Corrections.

That leads to more overtime for correctional officers and increased costs for sheltering and feeding the inmates, the department said.

Parnell also asked for an additional $4 million for prison health care to cover medical costs required by state law, such as treatment for chronic illnesses and visits to the emergency room.

Prisoners who have more than $15,000 in annual medical costs account for more than $7 million of the department's $30 million health care budget, according to the department.

"We have seen an increase in catastrophic illnesses," said Leslie Houston, the department's director for administrative services. Those include several inmates with cancer and at least one inmate on kidney dialysis.

So far, the department isn't considering cuts to health care services for inmates -- what it provides is required by law.

Corrections Commissioner Joe Schmidt said Wednesday he is working on other ways to control costs, including a new system for dealing with staffers going into overtime.

RISING HEALTH COSTS

The rate of Alaskans signing up for Medicaid was flat for years but has increased noticeably since 2009, when the global recession began to hurt the state economy.

The state Department of Health and Social Services wants $53 million more this year to deal with increased Medicaid costs.

The department also wants $2.3 million to cover public health expenses, including money for nurses who otherwise will face layoffs.

The department did not share on Wednesday how many nurses' jobs are at risk.

One of Parnell's requests for more money actually reflects well for the state: Because the Alaska Permanent Fund investments are growing again, the state corporation in charge of the oil-wealth savings account owes more money -- to the tune of $18.5 million -- to the outside companies that invest the money.

AN EXPENSIVE ELECTION

The Alaska Department of Law is asking for an additional $268,000 this year to pay for what it called an "extraordinary" election year.

In particular, the close U.S. Senate primary race between Republicans Joe Miller and Lisa Murkowski required the state to defend its decisions in court on how it counted write-in votes for Murkowski.

Elections normally cost the Law Department no more than $200,000 annually, but this fiscal year, which began July 1, the cost of defending the state on election matters had exceeded $467,963 by Dec. 31.

Parnell's supplemental budget request is scheduled for its first hearing today in the Senate Finance Committee. The bill is Senate Bill 76. The companion bill in the House is House Bill 137.

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