Joint committee finishes operating budget - Must Read Alaska
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Friday, August 23, 2019
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Joint committee finishes operating budget

TRANSFERS $10 BILLION TO PERMANENT FUND CORPUS

The House and Senate conference committee finalized its negotiations over the State’s Operating Budget today, spending $4.3 billion on statewide programs and operations.

The budget includes an appropriation for next year’s (FY 2021) education budget, but the FY 2020 education budget is still likely heading to court over a disagreement about the constitutionality of “promissory note appropriating” without actually setting aside the funds.

The operating budget does not include a Permanent Fund dividend. That is being argued in a separate bill in order to avoid forcing the Dunleavy Administration to send out layoff notices due to a delay of the budget.

The Legislature intends to vote on the operating budget bill on Monday.

On Sunday, the House will take up HB 1005, the bill that would set the amount of the Permanent Fund dividend for this year.  Its sponsor, Rep. Tammie Wilson, says she will now back a $3,000 dividend, after arguing for a $1,600 dividend for the past few weeks.

HB 1005 has been languishing as the sides debate whether the Legislature should stick to the statutory formula that would pay $3,000, or pick another number, such as $1,600, as the House Democrat-led majority proposed with Wilson’s bill.

The Senate has its own version of a Permanent Fund dividend bill, SB 1002, which it will take up Monday as well.

The operating budget reduction from last year’s budget came shy of the $200 million hoped for by the Senate. After negotiating with the Democrats in the House, the final reduction is closer to $190 million. The agreement transfers more than $10 billion from the Earnings Reserve Account of the Permanent Fund into the corpus of the fund, where it’s protected from future spending.

The budget agreement now must be voted on by both the House and Senate as a whole, and it appears the Legislature intends to do so before special session ends in 7 days.  Otherwise, the governor will call the Legislature into special session in Wasilla, his home turf.

Statements were released by the Senate Republican Majority:

“This budget delivers solid results for Alaska families and businesses,” said Senate President Cathy Giessel. “We managed to reverse government spending back 15 years – that’s a huge achievement.”

“This budget delivers significant reductions to government spending, keeps Alaskans safe, and protects the Permanent Fund for our kids and grandkids,” said Sen. Bert Stedman, co-chair of the Senate Finance Committee. “Locking up $10 billion plus into the Permanent Fund’s constitutionally protected vault will keep it out of reach of future Legislatures. It will ensure our descendants always benefit from the resource wealth accumulated over the past 40 years.”

“The people of Alaska sent us here to make the hard decisions for the long-term benefit of all Alaskans, and that’s exactly what we intend to do,” said Sen. Natasha von Imhof, co-chair of the Senate Finance Committee. “We locked away $10 billion into the Permanent Fund’s principal, taking more than half the earnings off the table, forcing all state spending to be in line with our annual revenues and protecting our savings accounts for emergencies.”

The spending bill will be transmitted to the governor, who has said that expenditures cannot exceed revenues.

For this budget, which has a $600 million surplus, there is still as much as a $1.3 billion budget gap because the $3,000 Permanent Fund dividend has not been added to it.

If Gov. Dunleavy does what he said he plans to do, he’ll make serious vetoes in order to balance the budget and pay the dividend.

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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

  • Sounds like a few folks in the legislature started to get somewhat serious, I’m guessing they’ve heard from their constituents. Hopefully Governor Dunleavy gets the red pen out to show them how serious he is.

  • If legislators cannot do their job due to the pressures of the special interests, then Governor Dunleavy needs to veto the luxury items such as Public Radio/TV, 1% For Art, AK Performance Scholarship Program, WWAMI, AK Gasline Development Program, and many, many other unnecessary items. Who wants to use their PFD to pay for these pork programs that benefit a few?

  • Is the Governor a man of his words?
    June will tell.

  • The house and Senate never seem to get their job done when they are in session. They are always going into over time. I propose that if they can’t get their job done within the constitutional time frame and they go into Speical session that they should not be paid for it because they never finished the job which we, the people sent them to do.
    Our problem is we have so many Special Interest groups looking out for their share, but few looking out for the average Alaskan citizen. Most of us live on a budget but the government doesn’t understand that. After all, it’s their money.

  • I’m wondering. In the use of the red pen line item veto. Can he reduce an appropriation or only veto the entire appropriations? That applies to many aspects of the budget, but of specific concern is the 10 Billion to the Corpus. That leaves 9 Billion in the ERA. Even with increased oil flow will that an interest keep it viable for solid PFD payments? If he can reduce vs only veto, I’d say “inflation proof” the PF to say 2-3 Billion.

  • He can reduce.

    for example: walker did on the pfd and university budget.

    Governor can’t increase.

    It would be great if SD would inform the public on how the whole governor veto process-override process-timeline works.

  • This legislature is borderline criminal in its actions and inactions. Will the people hold them accountable?

  • Sounds like the dims/libs still haven’t figured out that the PFD actually belongs to Alaskans, not politicians or liberal socialists/democrats. Another “end around” attempt at stealing the PFD. Voters need to come out “en-masse” and show these would be representatives who’s really the “boss” in Alaska. Short, straight answer–The Alaskan People. This entire episode of “political adroitness” needs to be in the rear view mirror, for Alaska’s sake. If allowed to continue, the PFD will be nothing more than a footnote to Alaskan history. Reminds me of something I read, “What they like to drink most, is wine that belongs to others”. (Diogenes.)

  • They the AKLEG just opened Pandoras Box. The Governor should Veto 2.1 Billion of the 10 Billion transfer requested by the AKLEG to be transfer out of the ERA as it would be in part the earnings of the PFD capped and placed in the ER by previous governors and ALKEG put into an this ERA account designated for Dividends from the last three years. He could veto this amount into a dividend for the people to reverse what was done over the last three years plus. If Walker could veto a transfer then Dunleavy could veto an Appropriation transfer and divert it into a dividend as prior governors have done..