Alaska House approves $11.5 billion budget, sends it to Senate

Spending plan calls for $1,600 Permanent Fund Dividend and money from fund to cover deficit

Members of the House of Representatives watch the vote on the state’s operating budget bill at the Capitol on Monday, April 2, 2018. The House passed the bill along caucus lines. (Michael Penn | Juneau Empire)

With a 21-19 vote on Monday afternoon, the Alaska House of Representatives approved a $11.5 billion state operating budget and forwarded it to the Alaska Senate for consideration.

 

The budget, which passed largely along majority/minority lines (majority rules chairwoman Rep. Gabrielle LeDoux, R-Anchorage, joined minority Republicans in opposition) calls for a Permanent Fund Dividend of approximately $1,600.

That dividend will cost approximately $1 billion from the Alaska Permanent Fund.

The budget will now go to the Senate, which will put its own suggestions forward. Those suggestions will come back to the House and likely be rejected, setting up an end-of-session compromise.

For now, the House’s budget is a statement of principle and the start of negotiations.

To close the state’s multibillion-dollar budget deficit, the budget calls for spending $1.7 billion from the earnings of the Permanent Fund and $700 million from the state’s Constitutional Budget Reserve.

Spending from that reserve requires a three-quarters vote of the House (and a separate three-quarters vote of the Senate). That three-quarters hurdle was not met Monday, which sets up another significant debate later in the legislative session.

Rep. Sam Kito III, D-Juneau, who has previously said he supports a higher CBR balance, joined minority Republicans in voting against the CBR spending. The final tally was 21-19.

This year’s budget is larger by more than $200 million than the proposal approved by lawmakers last year. It appears even larger than that because of bookkeeping — included in the $11.5 billion is $1 billion in spending authority for the trans-Alaska natural gas pipeline. That billion dollars doesn’t exist yet; it’s merely a line item that allows the Alaska Gasline Development Authority to accept (and spend) that much money if it finds outside investors.

Monday’s votes came after almost two weeks of deliberation on the House floor. Minority Republicans offered dozens of amendments in attempts to cut ordinary governmental expenses, even as some voted for a larger Permanent Fund Dividend.

According to a tally offered by staff to Rep. Lance Pruitt, R-Anchorage, almost $31 million in proposed cuts were offered by Republicans and rejected on the House floor during those two weeks.

On Monday, minority Republicans said they would not vote for the budget because those proposals were not taken up.

“I think this is a very irresponsible budget in a time of recession,” said Rep. Lora Reinbold, R-Eagle River.

Rep. Dan Saddler, R-Eagle River, said the coalition House Majority should take full credit for the budget that passed the House.

“They own it lock, stock, and Vitamin D,” he said, referring to $500,000 for Vitamin D research that was included by Rep. Paul Seaton, R-Homer, in the budget.

House lawmakers have taken an extraordinary amount of time to approve the budget and send it to the Senate for consideration.

Monday was the 77th day of the legislative session, and no House (since the passage of the 2006 ballot measure calling for sessions to be limited to 90 days) has taken so long to pass a budget to the Senate.

In 2012 and 2013, lawmakers needed 59 days; last year, they needed 63.

This year, a significant amount of trouble was caused by an amendment approved by Rep. Chris Tuck, D-Anchorage, that called for a dividend of more than $2,700. That amendment, which received a 21-19 vote of approval a week ago Monday, divided the House Majority for a workweek.

On Friday, the House agreed to a $1,600 dividend: more than the $1,258 proposed at the start of the budget process, but less than Tuck’s amendment had suggested.

Rep. David Eastman, R-Wasilla, said during the floor debate that he has “some very harsh words for the process this budget has traveled over the last 77 days of this session,” and forecast that the past troubles are an indication of more difficulties ahead.

Without an agreement on the Constitutional Budget Reserve, he said he thinks lawmakers “will be here, well, longer than I want to be here.”

The Senate is expected to receive the operating budget on Wednesday; the Senate Finance Committee could begin formally considering it as soon as that afternoon.


• Contact reporter James Brooks at jbrooks@juneauempire.com or 523-2258.


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