The Alaska House of Representatives passed a compromise operating budget on Sunday. It includes $4.38 billion in spending on the portion of the budget directly controlled by the Legislature. This is a $190 million reduction from the 2019 budget.
The Senate is scheduled to vote on the budget measure, House Bill 39, on Monday. If it passes as expected, it would go to Gov. Mike Dunleavy’s desk later this week. If he signs the bill, it would avoid a state government shutdown on July 1.
Nome Democratic Rep. Neal Foster, the co-chair of the House Finance Committee, said it was time to act on the budget.
“With the new fiscal year starting in a few weeks, on July 1 to be specific, it’s important that we pass this budget, so that there’s no disruption to health care, assistance to seniors, transportation and to increasing our efforts to fight crime in the state,” he said.
The budget doesn’t include a permanent fund dividend. But it has a roughly $600 million surplus that could be put toward dividends. The Senate is scheduled to vote on a separate dividend bill on Monday.
Wasilla Republican Rep. David Eastman opposed a transfer from the permanent fund’s earnings reserve to the fund’s principal, which was included in the budget. He said the reserve should be used to pay for dividends.
“How can we now vote today in good conscience to take more than $10 billion out of that account when we’ve been told previously that we don’t have … in this budget funds to pay a dividend?” Eastman said.
The bill passed along caucus lines, a 22-15 vote. Anchorage Republican Rep. Gabrielle LeDoux, who is not a member of either caucus, voted no. Three representatives were absent.
The House also passed a resolution — again by a 22-15 vote — to form a working group to consider how permanent fund earnings should be used, including the dividend formula. If the Senate passes the resolution, the group would have four members from each chamber.
LeDoux opposed the resolution. She said the entire Legislature can address the issue.
“It seems like since oil dropped in November of 2014, that we have been discussing and discussing and discussing the PFD,” she said.
Anchorage Republican Rep. Chuck Kopp said the working group would be helpful in giving the Legislature recommendations on what to do. He said lawmakers should be truthful with the public that the dividend formula in state law isn’t sustainable.
“You don’t follow out of fear, with people who are screaming who don’t have accurate information,” he said. “I’m all about leading. I will give my constituents the truth, and I invite them to not support me if they want to believe something else. Because I’m going to come down here and absolutely drive at the truth every single time.”
The last day of the special session is Friday.