House Finance budget leaves $1,400 for dividends

By
Suzanne Downing
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35

FINAL NUMBER FROM COMMITTEE IS $700 MILLION LARGER THAN GOVERNOR’S BUDGET

The House Finance Committee completed its work on the State budget on Friday. It goes next to the floor of the House of Representatives for consideration and possible amendments.

Here are some of the highlights, keeping in mind that the budget that the committee was working off of was not the one offered by Gov. Michael Dunleavy for 2020, but was former Gov. Bill Walker’s FY 2019 adjusted budget:

The committee cut $114 million from agency operations and $143 million from statewide items for a total of $257 million total net cuts from the adjusted 2019 budget.

The total state-funded spend in the House Finance proposed budget is $5.3 billion, nearly $700 million more than Dunleavy’s $4.6 billion proposed budget.

[Read: House Finance budget detail]

The only identified source for that level of undesignated general fund spending is the Alaska Permanent Fund dividend, and indeed, the budget approach by the House Finance Committee from the outset was to fund programs first and then calculate dividends for Alaskans based on what is left over.

The plan currently leaves a dividend for eligible Alaskans of about $1,400, which is $1,600 less than Gov. Michael Dunleavy’s $3,000 dividend. Dunleavy has $1.9 for the dividend for the budget.

House Finance cuts include:

  • $13.5 million from the Department of Corrections
  • $72 million from the Department of Health and Human Services
  • $13.8 million from the Department of Transportation
  • $10 million from the University of Alaska system, less than one tenth of what Gov. Michael Dunleavy proposed cutting ($134 million)
  • $2.6 million from the Legislature’s budget
  • $1 million from the Office of the Governor

The current House budget holds steady spending for the Pioneer Homes and the Senior Benefit program, and funds K-12 education for 2021 at $1.324 billion, but does not fund education for 2020.

Why is FY 2020 education not funded? The committee leadership appears to be relying on advice that the 2018 Legislature had already appropriated money for education for 2020 when it forward funded education.

Under AS 14.17.300(b), funds may be expended from the Public Education Fund without further appropriation. The amount in the Public Education Fund appears to come up a bit short, however, at $1.17 billion. Education’s budget was forward funded last year for FY 2020.

The current House budget also increases Public Safety funding by $10 million, and makes no cuts to the Village Public Safety Officer program.

When the budget reaches the House floor, it will once again be the subject of lengthy debate. And the dividend amount will surely be part of that debate.

To be fair, the House Finance Committee did not set a dividend amount, but it also did not say where the money will come from to pay for the budget.

Dunleavy’s proposed budget was built from the ground up and ended up being $1.6 billion less than Walker’s 2020 budget, because it was based on actual revenues. So the House and the governor are working from different budgets.

In total spend, including all funds, the House Finance proposal is $10.2 billion.

Voting in favor of the budget in House Finance were Co-Chairs Tammie Wilson and Neal Foster, Reps. Daniel Ortiz, Bart LeBon, Gary Knopp, Jennifer Johnston, and Andy Josephson.

The Republican minority voted against it: Reps. Cathy Tilton, Kelly Merrick, Ben Carpenter, and Colleen Sullivan-Leonard were all no votes, as they were looking for deeper cuts.

In years past, the Finance Committee has released packets of amendments ahead of the hearing to allow for transparency and for the Administration to review them for technical accuracy. This year, that did not happen.

Another new practice this year is that the Administration’s subject experts were told to not be in the Finance Committee room to help answer questions members may have about implementing a proposed amendment or if funds are available based on the funding source proposed in the amendment.

In years’ past, the Administration was always asked to be in the room to help answer questions.

This was a committee making multi-million dollar decisions without experts in the room. The result may be that there will be a lot of cleanup work to do in the Senate Finance Committee when the budget arrives in that body.

House Finance will meet Monday at 1:30 pm to hear from the Department of Education on a plan for the school bond debt reimbursement program and HB 106. Members will also take up HB 41, shellfish enhancement public testimony.

35 COMMENTS

  1. Honestly, that’s better than what I figured they would do. It’s not nearly enough and will need to be reduced or it will be cut to where it should be anyways. For this group of legislators the fact that they actually made some cuts is huge, now that they know it can be done they need to get serious and do the job they were elected to do. Just double the cuts you made, and then go make cuts in other departments too. See not that difficult.

  2. That budget needs to go back and re worked. We are not going to fund K-12 but we have no trouble funding Higher ed. That is dog dodo. I say with the job they are doing and not cutting the fat out of the state we vote to defund legislators and let the people make a reasonable budge for the state. There are areas that can be cut and as a ex state retired I have a few was to save our state money.

  4. Still starting at the wrong place. Start with FULL PFD’s, then work from there, like the elected Govenor said he would!
    The last two RIP off years the Governor did the PFD rip off and the rest of the government was like, “Yeah he is the Governor.” Now we have someone in that is on the peoples side and now the Governor has no power or athority?
    I think not!
    I call B.S.

    • Legislature has no requirement to start with full PFDs, Paul. Governor can certainly line-item veto any budget items they come up with but that (assuming it survives override) won’t help get to a full PFD. And Governor certainly isn’t going to veto legislature’s PFD amount (or part of it like Walker), right?

  5. TAMMMIE WILSON, read our lips: are you a Republican? Are you a Conservative? What happened to you? Are you sitting as head of the Finance Committee just to feel important? PLEASE, step-up and help out our governor. The PFD was important to you last year. Do the RIGHT thing and stop the bandits in the House.

  6. It’s our money leave it alone. Balance the budget make the cuts and stop all the spending! We want a state wide vote before you thieving legislators touch our money! Lets move the legislation to Anchorage so we can keep them in line, keep the capitol where its at. Sales tax on all luxury items no tax on grocery’s, fuel oil , electricity, cloths, keep the current tax levels on gas and diesel. Look into renegotiations with the oil companies. Our legislators’ have a bad habit of doing what benefits’ them instead of doing what their constituents want. That’s the main reason when they are in session they need to be moved to Anchorage to legislate under our supervision.

  7. De fund UA. UAA lost accreditation in its Education program. The Chancellor and UA President said they didnt know things were bad in the school of Education. No the President wants to close the UAA College of Education but still have students there, just give them degrees that say UAF.
    How many more programs are a good out to loose acreddidation?
    Cut state funding by at least half until the entire UA system can show all programs are fully accredited, in good standing, graduate rates reach national standards and at least 70% of graduates are employed in thier degree field within 3 months of graduation.

    I think all after school extracurricular activities in public schools should receive no public funding. No sports, music, drama, debate… if people want that let them pay the full cost. That will cut the education budget and save the state hundreds of millions.

    • A good lady by the name of Maxine Voss told the directors that the Education system was in jeopardy in 2012 while she was assistant director at the Matsu College so his boat does not float they did not know.

  11. Tammie, please get off of the High Chair and get us our full dividend. We are counting on you and Governor Dunleavy. Appreciate your ongoing fight with Luke Hopkins (through his boy) over wood burning issues, but girl, you got bigger fish to fry. Get with it.

  12. Tammie, Thank you for being the adult in the room.
    Why are not the people ecstatic about $1400? It’s more than we can afford and I suppose Tammie is expecting it to get hammered down by the actual revenues. I am projecting $1000 might be affordable without trickery.

  13. Chris Nyman, there is $63 Billion in the A.P.F.. If all eligible Alaskans got what is due, it only comes to $2B. State expenditures do NOT get paid with A.P.F. monies, so why are they punishing it’s citizens?

    • Exactly. Yet, politicians are running around in the 49th state spreading panic that Alaska is broke. With $63 BILLION in the bank? Is it raining yet?

    • You are incorrect sir. You are not “due” anything. And yes State expenditures do get paid from PF Earnings.

      Its Dividend amount versus government spending….fight it out!

      • … So if you find oil or gold or some other mineral under your home… You know you don’t own that. The state does, and they pay for it with your PFD. We traded our mineral rights for an annual dividend..

  14. The PFD is not a budget item and should not be touched except by the people. When my finances are low I stop spending by cutting the fat out of my finances. The people get less than 10% of the oil revenues and the people of Alaska own the minerals of Alaska. We give most of that to the state to spend on the needs of people. Our part is calculated by a set of factors no the government. None of the PFD is suppose to be spent. But it’s being treated as a rainy day fund. Cut the fat and live with in your means. The most important is DPS, infrastructure, and K-12 Eduction and then state Administration. Until those are covered nothing goes out. And has I said PFD is not a budget item. That is the issue Chris I have been in alaska since 1974.

  15. The main failure in logic for the Dividend Believers: Yes you are owed a portion of the oil revenues. You also owe your share of State expenses!…..so fight for what you want through the electoral system…..

  16. Chris I am a retired State Employee. And I know that the State has way too much fat. And the way some are building an empire are doubling state costs. A lot of state services are spoke and wheel. If DOC needs say a new truck they must procure the truck thru DOT. DOT buys the truck and then when it’s delivered to DOC it has procurement costs added to the original cost of the truck. The university runs the same way with IT like the phone services they charge 44.00 a phone that sits on a college staff desk. It would be cheaper to have MTA handle the phones. But it mandatory you use the mother campus. It’s things like this that I saw that falsifies Our operating costs. There are kids that were created for individuals that just keep hanging around payback positions that are not needed.

    • When you make a blunder like you did above about PFDs being a non-budget item, you are not going to get a pass when making a bunch more accusations IMO.

  18. I urge you to look at the history of the PFD it was made as a fund for the people and operated with calculation that would preserve its tenure. Governor Hammond Done a good job with it . It has changed due to people that could not stand not having it to spend. It was not a budget item it was a formula.

    En.wikipedia.org/wiki/Alaska _Permaent_Fund

    It was not until later the legislature dug it’s paws in.

    • PFDs had been considered off-limits until Gov. Walker made his decision to take half and got sued for it. Supreme court agreed that it was a “budget item” so there you have it Gary. You weren’t the only one who thought that way but you were wrong.

  19. Bill you just proved my point thank you. It was not till recently that a judge was found that ruled it should be a budget item. But a judge ruling like that is like them ruling your pay check is now part of the state income and you get what they don’t want to spend. ???

    • Another asinine statement IMO, Gary. You are making a false statement that PFD payments are like your pay check. While you and others felt those PFDs were yours (statutorily) you’ve been proven wrong-you don’t like that but what are you going to do about it? Suck it up!
      Tough noogies!

  21. Bill you are obviously A liberal person that believes in power for the government and screw the people so will leave it at that

    • You couldn’t be more wrong, Gary. You, on the other hand, seem to believe that our Courts must believe in “screwing the people.” But maybe that’s only when their rulings go against you? Heheh!

  22. Not a dime from the PFD. We need a state Wide Vote before any legislator puts their thieving hands in the pie again. Deeper cuts to the budget a lot more from the University! The capitol needs to stay in Juno but the legislative sessions need to be held in Anchorage from now on so we can keep them on task and in line with the will of their constituents’ not their own self seeking interests. We voted for the Gov. and he ran on giving all Alaskans a full PFD this year.

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