The Alaska House passed the state budget Monday by a bare majority. The 21-19 vote sends the spending plan to the Senate. The action came after minority-caucus Republicans criticized the budget for not including more of the spending cuts they proposed.
Homer Rep. Paul Seaton spoke in a favor of the budget, House Bill 286. He’s a majority-caucus Republican who shaped the bill as the co-chairman of the House Finance Committee. Seaton noted the state would draw $1.7 billion from Alaska Permanent Fund earnings to pay for state government.
“This budget is historic, in that it is the first time we’re planning to use the percent of market value calculation for (the) permanent fund earnings reserve account for public services, in addition to providing the annual permanent fund dividend,” Seaton said.
The budget price tag comes in at $5.5 billion for the portion of the budget the Legislature focuses on each year. That’s $548 million more than last year.
Palmer minority-caucus Republican Rep. DeLena Johnson criticized the budget. As an example of spending she opposed, she cited a $500,000 study of vitamin D deficiency supported by Seaton.
“There’s still a lot of waste,” Johnson said. “It comes back to accountability. We are accountable for this budget and if we’re not able to bring something forward that shows that we’ve really done our due diligence the budget to the point that is manageable, then … I can’t support this budget.”
North Pole Republican Rep. Tammie Wilson agreed there was still room to cut.
“I am an absolute no” on the budget, Wilson said. “If we can’t even take out the fat that is in this budget, before we could have the real discussions on the other areas, then we truly aren’t looking for change or transparency.”
Much of the increased spending, $263 million, was due to a rise in the permanent fund dividend from $1,100 last year to roughly $1,600. The rest of the increase was mostly for payments for public worker benefits, a $107 million increase, and another $100 million increase for Medicaid and children’s health insurance.
Anchorage Democratic Rep. Les Gara said the increases cover the cost of inflation and support public safety.
“Those of us who are voting for this budget are saying, ‘Enough is enough. People have a right to be safe in their homes,’” Gara said. “That’s not waste, that’s not fat … those are basic services the public deserves.”
Any changes the Senate makes in the budget would likely be worked out in a conference committee.
Gov. Bill Walker put out a newsletter Monday reiterating the two conditions under which he’d accept a draw on permanent fund earnings. He said the draw must not endanger the long-term health of the fund and be set at fixed percentage in state law, and that there must be a legal limit on how low the PFD can be.