Capital budget high-centered in House - Must Read Alaska
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Wednesday, October 23, 2019
HomePoliticsCapital budget high-centered in House

Capital budget high-centered in House

The Alaska Senate on Saturday unanimously approved Capital Budget items in Senate Bill 2002, introduced by Gov. Michael Dunleavy.

But then came Sunday, and a vote that went nowhere in the House, as the amount of the Permanent Fund dividend, which had nothing to do with the Capital Budget per se, became the stumbling block.

The Capital Budget passed the House 26-6 on Sunday, but then, with five votes short of the amount needed to access the funding for it, the measure failed to move forward.

Nearly $1 billion in matched federal funding is at stake for construction projects, as well as funding for rural energy subsidies, and more. The bill also contains money for this year’s Alaska Performance Scholarships for college students.

This is the second time that the House has failed to get a supermajority vote that would allow the Legislature to access the Constitutional Budget Reserve. The holdouts in the House say the Legislature must first pass a $3,000 Permanent Fund dividend, before they will allow access to the CBR. They are working one of the last levers they have to get that money into the hands of Alaskans.

The House minority is also blocking the majority from enacting what is known as a “reverse sweep.” That would usher funds back into specific state programs that had their unspent funds “swept” into the Constitutional Budget Reserve at the end of the fiscal year, due to legislative inaction.

There were several members with pre-excused absences on Sunday, including conservative members of the Republican minority: Reps. Sara Rasmussen, Mark Neuman, Ben Carpenter, George Rauscher, Dave Talerico, Josh Revak, Laddie Shaw, and Ben Carpenter.

The Legislature has been in session for the better part of 187 days this year, more than six months altogether. The current special session could run into the first week of August.

The funding mechanism for the Capital Budget is expected to be voted on again Monday during the 10 am floor session.

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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

  • I was hoping it would have been noted early on in the article, that the House failed to achieve the supermajority for funding the capital budget because 7 Republican members were absent, and all the remaining Republican belonging to the Minority voted against funding it. I have great hope, that their supporter will understand that Alaska is currently on its way to miss 1 billions dollars of federal funding because the Republican Minority does not want the State to spend 100 million in matching found. The Republican Minority who voted against should reflect on the fact of giving Alaskan 3000$ PFD won’t offset the cost of missing this 1 billion of federal funding.

  • Somebody should start recall petitions on the eight who failed to show up for one of the most important votes of the year — unless they have a damn good excuse.

  • It’ll be kinda nice to have that PFD for gas money when we’re all out of work. A billion Federal dollars not being spent into the economy is gonna leave a mark.

    • Exactly. The 15,000 construction workers standing idle is just a start. Those workers won’t stop for coffee, won’t buy new things from local shops . . .
      .
      This is dangerous game they are playing. I’m going to call the absentees and tell them to get to work.

  • Leveraging the capital budget to get the reverse sweep didn’t work so well, did it ?
    Kudos to the House minority for holding the line ! They learned from the minority in years past how the game is played. The 5.25% POMV does not reflect the real earnings of the fund. The 5 year average would provide 1.9 Billion for the PFD and the same for the Gov’t spend. The Governor already vetoed their budget once. You think they will give up those Cuts, while he has based his election on the Statutory Dividend ? If you listen to Lance Pruitt’s speech on the floor today, you will understand why this un-amended Bill is going nowhere. The tyranny of the majority is thwarted for at least the time being…

    • Most knowing folks talk of closer to 4% is the allowable amount that can be taken from a fund without causing the principal to diminish. And the 5.25% has nothing to do with the real earnings of the fund, either. Our PF has had some great earnings lately but the POMV is to allow the fund to hold up even in down years. You are only talking the earnings for this extremely large 5-year average-remember we have never had a $3000 PFD in the almost 40 year history of dividends.

      • The greed is eating them.

        • I suspect that POMV percentage is less about greed than it is about getting something that worked. We are in a long stock market upswing (almost 10 years) giving these large statutory PFDs that were impossible to change in an election year but resulting in that POMV bill.
          I remember last year’s House voting for a full statutory PFD and later reducing it after members realizing it would bust their budget.

    • Yeah, a bill that made it out of the senate unanimously is being held up by 17 people. That’s democracy for you. If you can get 15 people to “hold the line” you can crash the state’s economy.
      .
      I wonder when they will realize the line they are holding is tied to a sinking anchor?

    • They are just amateurs Andrew, and are just starting to learn about “holding the line.” And, of course, you’ve noticed that Pruitt voted yesterday for the bill and how long do you expect the rest of these amateurs to “hold the line?”

  • Seems to me that this is the second time this approach has failed. It’s hard to think about, but the majority is going to have to start talking in a new way to the minority if they want to pick up the necessary votes. The new approach might involve dropping the “we are smarter and more noble than you are” attitude.

    • You mean the bipartisan majority?

      .

      How are those OMB Senate hearings working as a positive example of what you speak?

      • I am not quite sure of what you speak. Activities in the Senate aren’t exactly critical to solving the budget/PFD stalemate. (by the way – OMB does not conduct hearings – committees of the Legislature do that.). The key votes belong to members of the Republican minority in the House. They have been treated like one-tooth knuckle-draggers by the majority. That approach will have to change.

        • Yes, the Senate generally like for their committees to hear from their counterparts in the administration. Commissioners, OMB director and so forth. How did those hearings go? Did the Republican Senators get a good taste of this “new approach” of which you speak?

          .

          You have a double standard.

          • I remain mystified by your comments. I worked for the Legislature for a half-dozen years. The current impasse revolves around assembling the necessary votes to pass appropriations that will meet with the Governor’s approval or, if necessary, override his veto. Other constitutional provisions impose super-majority voting requirements to spend money from the budget reserve. Thus, the Republicans in the minority in the House hold the critical votes. Most people that I know understand this; you seem to be working with what you perceive as other essential facts. Good luck, sir.

          • Not sure if you’ve noticed JMark but the latest voting showed that House needs only one more vote from their members to get that bill passed with super majority. Are you willing to die on this hill is what’s being asked of these minority members and today the Minority Leader Pruitt voted to pass the bill. How long do you think these yahoos can hold out? And further, when House gets those 30 votes you will see the rest change their votes so they aren’t shown voting against this Capital Budget. Just my opinion.

          • In your time with the legislature have you seen the commissioners defer all of their questions related to their operating budget to Donna Arduin? If your mystified, join the club, that was the point.

  • Exercise ‘courage’ // ‘responsibility’ and apply across the board 20% cuts the SOA budget, right-size the Gov’t, reduce staff and pay, eliminate agencies and programs.
    Git-R-Done!!!

    • Exercising “ accross the board cuts” rewards programs and agencies we do not need and harms programs that work and is a dim bulb approach to building a budget.
      Think about it Mr. Git-R-Done before you belch out another goofball platitude.

      • Joe G – Explain how that works please? And if we have programs we do not need than get rid of them but still cut across the board. We are spending more than we can afford. Please hold the name calling in the process of your explanation.

        • Joe described perfectly Mr. Git-R-Done’s remark as a “goofball platitude” IMO. How would you have described it Elizabeth?

          • Billy // Joey –
            Elizabeth brings up an excellent point and is a very common – valid question that most Bureaucrats seem to shy away from answering … Specifically:
            Why are we spending limited State dollars on Agencies and Programs we don’t need?
            Why are we spending State dollars on ‘non-essential’ services?
            Why are we subsidizing individuals and communities that only benefit a very few?
            What is the ROI on $3.3B on Health & Social Services?
            With a combined budget for K-12 and UoA @ ~ $2.4B, you don’t think there some efficiencies to be gained within these bloated institutions?
            Let’s Get Real! The State of AK has a serious spending problem that has been ignored that only the real solution is now some heavy cuts.
            Many of us in the Private Industry have been weathering this storm to the best of our abilities, tying “NOT” to sell the Family Farm, realizing that we now a Governor with the fortitude and courage to start making reasonable – necessary cuts. What we hear in return is a bally-hoo of nonsense, declaring Armageddon.
            So, I stand behind the Governor giving him 100% approval for what he and the Administration are trying resolve.
            I suggest you do the same!

          • Rob B., you’ve assumed we have programs we don’t need, and then proceed but without the back-up of your opinion/assumption here it means nothing. Unless and until you can show that there are unneeded programs stop with that assumption.
            If your assumption is untrue then everything after that assumption is worthless-so get-er-done with that back-up/proof or drop it.

  • Why did Bryce Edgmon vote against the capital budget and the reverse sweep? It would have given scholarship money to students and lowered fuel bills in the bush. It would have brought in Federal money for jobs. Is his pride getting in his own way? Can he do what is right for all Alaskans? I used to think he was just playing politics but now it seems to me that he is out to hurt Alaska come hell or high water. He wants to take $10,000 a year away from families. He wants to take over $400,000 a year away from my village. This will impact both local and state economies. We can’t afford this. We can’t afford Bryce Edgmon anymore.

    • What are you talking about here Greg?? Edgmon voted in favor of that capital budget with the reverse sweep.
      Get your facts straight, here.

      • Yeah, I typed it wrong. Perhaps he voted for it knowing it would fail.

        • You make no sense here Greg. This issue is entirely with Republicans in the House and not a single Democrat or Independent has done anything but vote to pass this bill.
          Your gibberish doesn’t help here!

  • Folks, sometimes the House majority led by Bryce Edgmon votes for a passing knowing full well that it will fail. When he blindsides the minority and stuffs a bill with pork, he is just playing politics.

  • THE RICH LIBS AND RINOS ARE STEALING THE PFD DIVIDEND MONEY FROM ALASKAN CHILDREN, SENIORS AND MINIMUM WAGE EARNERS!

  • Pass the PFD of $ 3000.00 first and you will get the Budget passed in a hurry and you will save the matching federal highway money. The 15000 will all be working instead of drawing unemployment benefits. The reason the rich and liberals don’t want to sign off on the PFD payment is the fact they may be facing income taxes for the people with a high income.

    • There are those Republicans who don’t have a problem with the taking of PFDs rather than face an income tax, for sure. However, it’s not liberals who have a problem with an income tax but they (liberals) do have a problem with the loss of government services from these Budget cuts.

    • How about: No?

    • I’m all for a 3K PFD + an income tax.
      .
      I’m all for a 3K PFD and ending payouts to oil companies
      .
      But there aren’t any legislators standing up for that.
      .
      So we have two choices:
      .
      1) $929 PFD, roads, construction jobs, aid to needy seniors, lights and heat in rural alaska, support for small business, a university that trains students for high paying jobs
      .
      2) $3,000 PFD, none of the above and a recession.

      • Added to your list, a $929 PFD and continuation of modestly funded programs to keep fresh and healthy Alaska Grown produce on the shelves of your local supermarket — produce which is already growing in anticipation of having a viable market available (that market has gone away with the loss of the state ‘audit’ program ensuring the produce is safe, which is required by supermarkets).

        Better stock up on those lettuce and tomatoes now !

        And while not important to most people, to those of us who grow Certified Potato Seed, the loss of ability to be certified (there’s a short time frame to do so) is
        pretty devastating. Having access next spring, come planting time, to locally grown potato seed certified as free of disease is extremely important. Along with that loss comes loss of monitoring capacity for, among other things, late blight in potatoes, which devastated crops in the Palmer area just a few years ago. Healthy crops literally melted down in just a few weeks. Come to think of it, that might be a good metaphor for what’s happening now in the political realm. Historically, late blight has led to famine . . .

      • Absolutely NO to an income tax. The PFD should be used for more mental health, substance abuse programs, and expand our technical training so people have a better chance of finding a decent job. (There’s many ways to train people for good jobs, just not the university.)
        .
        It would be great if our legislature could quit arguing about the PFD every year and instead focus on the many reasons why it’s difficult to bring in more new companies to Alaska. It’s too expensive for many Alaskan entrepreneurs to start a business, too.
        .
        An income tax harms the low-income (many of which are minorities, BTW). And a sales tax would severely damage those in the Bush. There are already many young people and families struggling. If they lost more income every paycheck, they have to work more hours. An income tax does more harm than no or smaller yearly PFD, IMO.
        .
        When Alaska leads the nation in per capita number of state employees, that’s a problem. The pension for all those $100K+ administrators is unsustainable. Tax them all you want but a blanket income tax for everyone is a bad idea.
        .
        BTW, no one is stopping anyone from voluntarily donating their PFD or some of their income to the State. I doubt many people are willing to do that, though.

        • Irene — great points!
          .
          S. Evans — what would you think of a tax that didn’t apply to anyone earning less than 40K a year?
          .
          Just curious, because it’s not really an option this year.

          • Adam, what do you think of an income tax that credits everyone their PFD amount taken from the statutory amount against their tax liability. This would allow every Alaskan to in a round-about-way to get their complete statutory PFD at the expense of non-residents and fat cats who haven’t been paying their share for some years, now.

        • S. Evans, right on.

          I hate how this debate has come to center around the notion that our state must have high levels of spending on public programs that “help” small business, specific educational programs, etc., or our economy will inevitably collapse because of a lack of cash infusion. That is straight-up-Keynesian economics. We could just as easily say that if you give everyone a $3,000 PFD, those people will go and use that money and stimulate the economy…oh wait, that’s what actually happens in the real world. And in that case, it more often reflects the real needs of people, because individuals with money are far better at determining where to spend their money than is a bloated government.

          This is our state’s Rubicon. Will we remain an income-tax-free state, or will we jump in with the southern states and establish the notion that our government is all things to all people and responsible for driving the economy with its taxes and spending?

          I really don’t care too much if we get a huge PFD or a small one, so long as it’s not a matter of the legislature being allowed to help themselves to whatever they want for whatever reason, because that will only lead to more spending. But I see very few discussing the other side of neediness in this equation, which is those in private enterprise who aren’t on the public dole and would just like to support themselves and their families. Both of my parents are small business owners. They worked far more than full-time, nights and weekends, and never took vacations. We couldn’t afford it, because their income together just kept our heads above water. We lived right around the poverty line most of my childhood, and they never had retirement, paid time off (or really any time off), or health insurance. We usually went without routine medical or dental care or even basic necessities like shoes. We never asked for public assistance. I can’t stand to hear all these people crying about how the government needs to support their jobs (with union membership, full benefits, and for teachers, summers off where they could work if they need to) at any cost, when the cost would in fact be an additional 10-15% off the top of my hard-working parents’ income, and they are in their sixties and have nothing to retire on. The answer to this problem is not another government program, but leaving people’s money that they earn alone. Give people like my parents a break for mercy’s sake. Bad enough that Alaska has been parceled off into boroughs so the greedy city assemblies can squeeze property taxes out of people they provide zero services to.

  • Love the title “High Centered”…
    It speaks volumes on the “Character” of Alaskans.

    • Like Neil Young said, a wheel in the ditch and a wheel on the track.

  • How about…..ask not what your country…..Or State can do for you, ask what can you do for them. If you want less freedom and be a slave to the government, then by all means……follow that carrot.

  • How about the house majority recognize our statewide election last year. How about the house majority remember we didn’t elect Mark Begich, and a few others like Paul Seaton. Go Dunleavy

  • It was my impression that the Alaska Performance Scholarship money was established primarily for students from the Bush. If I’m wrong, please correct me. The UAF has a scholarship program, including a fully funded office, that deals strictly with scholarship money for Bush residents. Does anyone at MRAK know the details of this particular part of the state budget?

    • I’ve seen that too at UAF, Judie. There is a scholarship, or honors program that serves only the needs of rural Natives. And the old Brooks Building at UAF, which originally supported the School of Mines, was renovated and converted into a cultural center for Alaska Natives only. Blatant prima facie RACISM, at the expense of the state. Bet that program won’t get defunded.

  • As long as we’re burning down Alaska what’s another 1 billion dollars, besides it’s federal money and we need to do our part in reducing big government.

    Is there a growing consensus to use the Permanent Fund as voters in 1976 intended? How about reinstating the income tax, the elimination of which Jay Hammond stated was the dumbest Alaska policy decision up to that time.

    • EL,
      My parents, my partner’s parents, and many of their senior-aged friends are the ones that voted in 1976. And very few of them like how the State’s continuous expansion has occurred. You like to keep harping about “basic services”, which is true, they voted for basic services. They, like me, don’t agree to some of Gov Dunleavy’s budget cuts, but they like the underlying idea of them. They, like me, think the Gov should have made more specific cuts to the many un-necessary departments, consolidating a few of them, cutting the “administrators” in nearly every department, and calling an end to the never-ending hiring of friends and big-donors with $100K+ jobs every time a new Gov moves to the Mansion.
      .
      And no, they, like me, don’t want an income tax to be reinstated at this time simply to allow our current bloated offices continue. They, like me, support the “basic services” they voted for. They’re retired, so an income tax wouldn’t even effect them, but they still don’t support it. The 1976 Alaska is not the same of 2019 Alaska, EL.

      • The problem with your screed is that you’ve made an assumption that our current offices are “bloated,” without showing anything to back it up. And what are these “basic services” you speak of??
        The PF was specifically created for it’s use when the oil dollars drop off and there does seem to be some movement towards just that, rather than PFDs IMO. That may require an income tax and we’ll put you in the column opposed to it but you need a better reason than “bloated offices” IMO.

  • How about we turn to G-D and start doing what’s right as individuals to help the less fortunate and stop relying on government to pay for it if you say you are a Christian or Jew you should be giving 10 percent of your income to the church national average of tithing from people who call themselves Christians give 4 percent now we are a judeo Christian country which means biblically as a whole to help those in need as a Alaskan I support the law on the books for the PFD at 3000$ and it’s the legislature responsibility to give us the money as the law is written if they want to drop the amount remove the law on it and vote for a new law giving a smaller PFD until this happens they must follow the law I use my PFD to survive the winter each year and since walker screwed us over 3 years I’ve been struggling to survive I’m disabled and can’t afford to live in town I have to live off grid 50 plus miles away to afford to live I get 52 dollars in food stamps and 815 dollars a month for my disability pay I worked for 30 years before I became disabled and it’s wrong to steal money from people who need it to survive.

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