Budget fails in House - Must Read Alaska
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Saturday, July 24, 2021
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Budget fails in House

In a session that lasted late into the night and involved several key votes, the Alaska House of Representatives on Tuesday night debated and voted on the budget compromise for HB 69.

Although polite and respectful to each other, legislators had deep disagreement over the Permanent Fund dividend, which was the sticking point.

The overall result was failure for the budget and its associated legislative mechanisms to pass in a way that would allow government to continue past July 1. No one was surprised by the vote, as all members had already signaled their intentions during various caucuses throughout the day.

Several Democrats and Republican Rep. Bart LeBon spoke in favor of the budget proposal negotiated by the conference committee, while most other Republicans were generally appalled at the use of the Permanent Fund dividend as a form of political blackmail against them.

The budget itself passed but the effective date clause did not pass, which means the budget would go into effect 90 days after being signed into law … or sometime in September. That would lead to a government shutdown July 1.

Also failing was the measure to allow the Legislature to borrow funds from the Constitutional Budget Reserve.

Conservatives in the House had many objections to the bills, including the way the Permanent Fund dividend was structured from fund sources that did not reflect the intent of the dividend being an actual oil royalty, but made it into a bargaining chip; the use of capital budget items as a tactic to bully the Valley members into voting for the budget; and some Republicans expressed disappointment that the conference committee had removed language the House had voted on that prohibits public money from being used to pay for elective abortions.

Some Republicans also said it was a travesty that the committee removed language that would have opened the Capitol back up to the public.

The House Republican caucus is not a binding group, meaning all were able to vote their conscience.

The only House member who didn’t show up for the budget vote was Rep. Sara Rasmussen, who boarded a plane in the afternoon and left Juneau, without explanation.

Rep. Andy Josephson said the compromise budget is fair. “This is an opportunity. In politics, you take an opportunity,” he said. He said that the members should look past the “poison pill” in the budget, which was there to coerce members to vote for a funding source for the Permanent Fund dividend.

Rep. Cathy Tilton said the public will not understand how the Legislature can take $4 billion from the Earnings Reserve Account and place it into the corpus of the Permanent Fund, while not paying Alaskans their rightful dividends. She also said more relief should have gone to the private sector, which has suffered from the pandemic economy.

Rep. Ben Carpenter noted that funding was removed from the Alaska Gasline Development Agency, which demonstrates that the Legislature has no confidence in the project, a bad signal to send to investors.

Rep. Neal Foster objected to the use of the word “coerced,” for the budget votes.

With 21 yeahs and 18 nays, the basic budget bill, HB 69, passed. But when it came to the effective date clause, however, it failed, 23-16. The House needed 27 votes to change the effective date as established by the Alaska Constitution.

Then, for borrowing more from the Constitutional Budget Reserve, and what’s called the “reverse sweep,” which takes money back out of the CBR, the vote also failed.

The passage of this measure took 30 votes, but came up short by six.

Because House didn’t pass the “effective date clause” or agree on the Constitutional Budget Reserve access, it’s possible that there will be a government shutdown on July 1. It’s also possible Gov. Mike Dunleavy will call the Legislature back into another special session next week.

HB 71, the Mental Health Trust budget, passed easily, with only Rep. David Eastman and Rep. Chris Kurka voting against it.

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Written by

Suzanne Downing had careers in business and journalism before serving as the Director of Faith and Community-based Initiatives for Florida Gov. Jeb Bush and returning to Alaska to serve as speechwriter for Gov. Sean Parnell. Born on the Oregon coast, she moved to Alaska in 1969.

Latest comments

  • Imagine voting for different lawyers and expecting a different outcome.

  • Annual Alaskan Traditions:

    Kenai River King fishing
    Russian River Red fishing
    Fall Silver fishing
    Fall Moose hunts
    Berry picking
    Flattop Solstice
    Mount Marathon Race

    Arguing endlessly about the size of the (no-longer affordable) PFD.

  • What a joke.

  • Life would be better without the distortion caused by the PFD.

  • Despite her ranting over the dividend and her poor constituents, Geran Tarr voted for all of this. Neal Foster voted against the the budget in conference committee but voted for all of this. Just a couple of big government politicians!

  • Apparently, some legislators wanted to put the $4 Billion into the Permanent Fund to protect retirement/health care for state/local/school district employees. They have their eyes on the PF to fund those items. Remember, Giessel and Anna Fairclough put $3 Billion into the PERS/TRS a few years ago to do the same. What is it with Sara Rasmussen? Does she not want to represent her district?

  • A long shutdown is needed to prove the point that most of Government is not needed and essentially pointless.

  • $81 billion dollars.
    When your reps in Juneau are nattering about not being able to pay you your PFD based on the statutory formula, just keep remembering that the fund has grown to $81 billion dollars…….and that they sincerely believe that your PFD is theirs, not yours.
    Thank you once again, Suzanne, for your continued in depth reporting and impeccable research.
    We really would be lost without it, because you are the only reliable resource for truthful news in Alaska, because our instate media are equally reliable…….at lying to us on a daily basis.

  • @David Boyle. Sara Rasmussen got word that this meeting wasn’t a frat party and there would definitely be no leg wrestling or beer pong involved. She would have actually have to “work”, so she wanted no part in it.

  • They want to take your measly dividend & fund state workers pensions. That is the brick wall that the Legislature continues to bang their heads against!

  • Smoke and mirrors, Svengali tactics. Shameful, utterly shameful, I am sickened by what the legislature has become over the years, their ravenous greed and support of special interests doesn’t have to be hidden anymore.

  • Time to lay off state employees and shrink the bloated government.
    The only reason the PFD is cut is to pay unionized, state employees and pay for all their glorious benefits.

  • In the next 4 years the stock market will crash and our $80 billion will vaporize then we can quit worrying about this damn check every year. I say split it in half give the state government half and do a 1 time pay out on the other half and forget it. I’m sick of this nonsense.

  • What a mess. The House Minority will have to swallow a bitter pill or cause great harm to the people of this State. I have to give the conference committee credit for the shrewd political tactics here.
    Here is a possible compromise for the House Minority:
    Pass the Effective Date and the Reverse Sweep.
    Vote down the CBR Raid – thus funding only the $525 Dividend. Then blame the small Dividend on the Majority and use it to justify putting the Dividend into the Constitution.
    Of course I would be against that (amending the Constitution) but we can fight over that in the next special session.

  • Sara, Loser, is just hiding, so she does not have to vote on our PFD.

  • They’ve been in Juneau since mid January……….and this is all they’ve done?

  • This reminds me so much of 1980 when the Legislature was full of people that were so avaricious, they wrote the original Dividend law that was so unconstitutional the Zobels heroically sued and won their case against the State of Alaska in both the Alaska and US Supreme Courts.
    It seems the only way out of the current fiasco is for someone to file a a Zobel-esque lawsuit against the State for funding Dividends by borrowing from the CBR with no demonstrated intent to repay the borrowed funds (as required by the Alaska Constitution). This is like an embezzler thinking that someday he/she will re-pay the stolen funds.

  • Thank you Suzanne! I’m glad I donated to you! I have been in this State for 58 long years. The State Unions all vote democrat, there are so many Anti-Alaskan Creeps ruining OUR Legislation Process. I would like to see them gone. And I will continue to Pray to Jehovah and Jesus for Their Protection against these demons. And Pray for those who remember and wish to Honor Jay Hammond’s Warning, “Vote it into The Alaska Constitution, before they rob Alaskan’s Blind! Because It does not belong in “government”!

  • I meant to write…I will Pray to Jehovah and Jesus for Our Protection against these demons…

  • Dog, you forgot to mention afn. Remember the afn where they were so disrespectful to the governor? They really didn’t do theirselves proud that day.

  • “Imagine voting for different lawyers and expecting a different outcome.”
    The story of the decline and fall of the republic. Reminds me of what is often repeated as a joke, but should be a parable: What do you call 10,000 lawyers on the bottom of the sea?…………..

  • I am not surprised and they will be back to blackmail and use the same leadership coercion to get what they want from those that are trying to help Alaskans. The Billions that they transfer just so they can claim they have no money except to take it from the Earnings Reserve is just one more lying tactic the public doesn’t understand. The same can be said for all the budget games they play so they can claim the budget is cut but the money spent every year has not decreased but only increased.

    You get what you vote for and returning the same corrupt politicians to Juneau every year gets you the same corrupt lying legislature. We eliminated some members in the last election but not enough.

    Don’t call them back! Let the government shutdown, hard working students go without their scholarships promised them but make sure the stop work order applies equally to the legislature, Executive and Judicial Branches, their staff and their children also. No late makeup appropriation to give State Employees missed pay. Keep public safety, corrections and mental health employees working but no others. No child support, unemployment or public assistance or Cares Act payments go out.

    Maybe enough Alaskans will be effected that when the next election comes around and they have to vote they will remember the legislators that designed this crisis and vote them out of office and support the Governor’s plan in SJR 6. This craziness will stop when they have no way to get their hands on every cent in the Permanent Fund!

  • “…….. I say split it in half give the state government half and do a 1 time pay out on the other half and forget it………”
    Day-To-Day Doug. Winning means burning it off faster than the other wolves so you don’t have to hear them howl. And this is why, even after true leaders create one of the most unique social investment programs on Earth and fought tooth and nail to protect and grow it, it is destined to be squandered like all good things are. Like Daddy used to say, split all the money on Earth evenly and give everybody their share. In 6 months, the same people who are rich today will be rich again, and the same people who are poor today will be poor again.

  • Good luck everyone.

  • If ever there was a time to pay the Full Statutory PFD, it’s now, when so many Alaskans are hurting from the loss of income due to the Pandemic Shutdowns and Cruise Ship Visitor/Tourist Industry Collapse! This direct payment to Alaskan Residents would be a timely and much needed “shot in the arm” that would help Alaska, and Alaskans navigate out of this difficult episode! The Only Reason I can see that our State Representatives would not approve this Full PFD now when it’s truly needed, is because they’re working for and/or beholden to Big Government Bureaucracy, Special Interests, and highly paid “Non Profits”, and Not For The People of Alaska!
    They don’t want the public to have an opportunity to vote on this because they know the public has always been in favor of the Full Statutory PFD!

  • The largest sum ever in the PF, thanks to Trump’s economy, and you —- in the Legislature are squabbling over not paying the 50/50 split, or worse, the $1,100?

    Everyone in the Legislature is padding their wallets on per diem. You people are the real crooks. The full statutory PFD is what we want…….retroactively, while the $81 billion is still intact. Under brainless Joe, the corpus us going to be worth billions south of that number.

  • The uninformed have spoken, once the lazy incompetent legislators destroy the PFD, they will be coming for your pay check. They refuse to do their jobs, and the corrupt republicans joined the democrats to create this mess. The governor needs to grow a pair and act like a governor, “see Florida”.

  • Yup. We have a winner down here.

  • The minority caucus caused a $500 PFD with their petulant “no” votes, after promising $3000….even their dummy voters are going to start to smell a rat here LOLOLOLOLOLOLOL….

  • Either Sara Rasmussen is in too deep with Zack Fields, Merrick and special interests, has too many family obligations or doesn’t know how to do her job. Either way, she’s in over her head.

  • On this task the job can be done by a computer app. This would save us money from our 80 billion dollar fund, and these people who have no minds to decide, can go back to talking about the politics of the bank of ‘mom and dad’. OBVIOUSLY, their working lives don’t depend on sweat and honest hard labor. They make me sick.

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