After a long day of debate of dozens of contentious amendments, the Alaska House voted 25-14 in favor of a $7.7 billion state operating budget on Saturday.
The spending plan for state programs is $1.5 billion more than the budget Gov. Mike Dunleavy had introduced in December. The budget includes $2,600 for Alaska residents, characterized by House leaders as partly Permanent Fund dividend of $1,300 and partly energy relief payment of $1,300 — both would be paid as one payment that is still smaller than the statutory dividend would be.
The operating budget now goes to the Senate, where it may be added to or trimmed. The Senate has been working on the capital budget, which may be transmitted to the House for its consideration on Monday.
The vote to enact the effective date clause on the operating budget failed, needing two-thirds of the House to agree. The liberal majority agreed to the effective date clause but even with a few Republican votes added in, it fell short. A similar situation developed last year, with the House not adopting an effective date clause and the media spun up a lot of froth around government shutdowns that never occurred.
The House did not vote in favor of the reversing of the automatic sweep of unspent monies from the various state coffers into the Constitutional Budget Reserve. The conservative minority in the House has been holding back on the “reverse sweep” to use as a bargaining chip, it being the only item they have to hold spending down or to get full Permanent Fund dividends paid to Alaskans.
Wasilla-Chugiak Minority Leader Cathy Tilton said the budget took the money due to Alaskans and funded the anticipated education budget for the following fiscal year. She criticized the majority for once again pulling a number out of a hat for the PFD, rather than following statute.
If the statute was followed by the Legislature, this year’s dividend would be about $4,200.
Gov. Mike Dunleavy proposed in his budget a $2,600 Permanent Fund dividend, and a partial back payment for dividends that are owed to the people of $1,250 to each qualified Alaskan.
The Legislature has not followed statute on the formula for the Permanent Fund dividend since Gov. Bill Walker broke faith with the people of Alaska by arbitrarily cutting their dividends in half in 2016, saying that it was needed for government programs. Instead of using it for programs, however, it sat in the Earnings Reserve Account of the Permanent Fund. That fund, which now has over $16 billion, has been used since Senate Bill 26 was passed in 2018; SB 26 uses a formula to take funds from the Earnings Reserve Account and use it for government, to make up for diminishing oil revenues.
Those Walker actions opened the door for the Legislature to take half of the statutory PFD every year since 2016, under legislative leadership that prefers government spending over following Alaska Statute or having the legislative courage to change the statute that sets the formula.
The Legislature gaveled in 81 days ago. By statute, it is supposed to only meet 90 days, but has not followed that statute for many years. Instead, it stays in session the full 120 days allowed by the Alaska Constitution, and then almost always extends another 30 days or longer in special sessions. This year’s legislative calendar is shaping up to follow recent practice.
Last year, the Legislature was in session from Jan. 19 – May 19 , May 20 – June 18, June 23 – June 28, Aug. 16 – Sept. 14, and Oct. 4 – Nov. 2, for a total of 214 days, or 58 percent of the calendar year.