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.