The House and Senate passed the final version of the State’s operating budget for the fiscal year starting July 1. Now, adjournment is just some formalities away.
With $3.1 billion in unrestricted general funds added to a previously passed $1.28 billion education budget, the total is $4.39 billion, plus $1 billion for Permanent Fund dividends of $1,600 each to qualifying Alaskans.
The minorities of each body voted against the budget, (Republicans in the House voted no, and two Democrats and two Republicans in the Senate did the same. Sen. Begich and Wielechowski, both Ds, voted for the budget, with Republicans Shelley Hughes and Mike Shower voting against it.)
This year’s operating budget inched higher than last year’s by $170 million, but is still $1 billion less than 2015.
The budget increases come in large part from the Department of Health and Social Services due to the Walker administration actively recruiting applicants for the traditional part of Medicaid (not the expansion), where the state must pay 50 percent of the cost.
The budget draws $600 million from the Constitutional Budget Reserve and covers some of the gap with a structured, sustainable drawdown of $2.7 billion from the earnings portion of the Permanent Fund, based on an endowment model approach called POMV — percent of market value. The Legislature earlier had passed the structure necessary to limit the amount of money lawmakers can spend from the Permanent Fund’s earnings.
None of this came with the multiple taxes that have been sought by Gov. Bill Walker and the House Democrats since 2015. The budget is also smaller than that requested by the governor; he asked for $4.7 billion.
And legislators set a Permanent Fund dividend that is more than 30 percent larger than what Gov. Walker proposed in December; he wanted dividends set at $1,216.
“The Legislature prioritized the state’s constitutional obligations in this budget,” said Sen. Anna MacKinnon, co-chair of the Senate Finance Committee. “There’s still much work to be done. The Legislature must continue to pursue legislative reforms to reduce the size of government and fix the structures and programs that aren’t providing the maximum return for Alaskans.”
“A lot of thought and hard work went into this budget,” said Senate President Pete Kelly (R-Fairbanks). “I am grateful for the work of my colleagues as well as the patience of Alaskans throughout this process.”
The operating budget passed the Senate by a vote of 15 to 4 and the House 21 to 19 for a combined vote of 36 to 23.
The unrestricted general funds for agency and statewide operations — those funds that the Legislature has control over — is the $4.39 billion amount. Add in designated funds and federal funds, along with the Permanent Fund dividend payments, and the budget swells to $10.3 billion, or about $14,000 per Alaskan.