For years, the minority caucus in the Alaska House has had a say in the state’s budget. But that may not happen this year, as the majority caucus looks to tap Permanent Fund earnings to close the budget gap.
House minority members say they’re being cut out of the budget process. House Minority Leader Charisse Millett, a Republican from Anchorage, said this:
“They’re not interested in what we have to say, and our contribution to the budget process,” Millett said.
To understand why the minority feels left out, it pays to understand what the state government’s two large piggy banks are – and what it takes to spend from them.
One account is the Constitutional Budget Reserve. The state Constitution requires three quarters of each house of the Legislature to vote to spend money from the reserve. That’s given the House minority leverage in past years, since it became impossible to balance the budget without this money.
The other piggy bank is the Permanent Fund earnings. For the past 35 years, the state has only spent money from fund earnings for Permanent Fund dividends. But if the Legislature wanted to, it could spend these earnings by a simple majority vote.
That’s what Rep. Paul Seaton wants to do.
The majority-caucus Republican from Homer has proposed drawing $4.2 billion from the earnings reserve to pay to close the budget gap. Of that money, $1.7 billion would go to the state’s education fund.
“We really want to work on the major thing that Alaskans want us to work on, which is the comprehensive, sustainable fiscal plan,” Seaton said. “And as long as we have an unfunded budget, we will be working on that for a long time. So we fully fund the budget by having that education fund.”
Anchorage minority-caucus Republican Rep. Lance Pruitt said the Senate will have the House minority’s back.
“I’m going to go back a ways, and go back to high school. I had friends and sometimes if you forget if people have friends and you mess with someone, then it comes back later and it really hurts,” Pruitt said. “And we got friends in the Senate. There’s a whole other body that this has got to go through.”
Pruitt said Seaton is manipulating the entire House majority by suggesting the budget change. Seaton is the House Finance Committee co-chairman, and proposed the change as the chairman of the committee’s budget language subcommittee.
“To try to hide something like that – that’s deceptive, that’s just flat-out deceptive,” Pruitt said. “But that being said, the whole caucus is resting on that one person.”
Seaton said past finance committee chairmen included changes to the budget language without any committee votes. On Tuesday, the committee did vote on Seaton’s proposal to draw from Permanent Fund earnings. It passed seven to four, along caucus lines.
“Every single amendment was offered and voted on by full Finance,” Seaton said. “So there were no balls hidden.”
Two years ago, the two caucuses were in opposite positions. The Republicans were then in the majority and wanted to shift Permanent Fund earnings in a way that would have allowed them to bypass minority support for the CBR. And most Democrats opposed the move, but they’re now in the majority that could bypass the minority.
Both sides distinguish their position two years ago from where they are now. Republicans say they only raised the idea of bypassing the minority two years ago because they wanted to avoid pink slips for state workers after months of budget negotiations. And those who were in the minority two years ago note the proposal then would have drained state savings by a larger amount than the current majority is considering.
For the earnings draw to be adopted, it would require another vote by the House Finance Committee, then votes by the full House and the Senate.