Senate passes its version of the budget - Must Read Alaska
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Monday, October 14, 2019
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Senate passes its version of the budget

The Alaska Senate today passed its version of the State’s 2020 operating budget, with all senators except Juneau’s Jesse Kiehl voting for it. For Kiehl, it simply doesn’t spend enough, but it spends too much on Permanent Fund dividends.

The Senate budget has $258 million in cuts to the unrestricted general funds for state operations, and includes $1.94 billion for Alaska Permanent Fund dividends that would amount to $3,000 per eligible Alaskan.

The House Democrat-led budget has $200 million in cuts and is silent on the Permanent Fund dividend. The House majority chose not to commit to a number in the House’s budget bill. Budget analysts infer, however, that the amount left for the dividend would be about a $1,200 check per eligible Alaskan.

The Senate budget also moves $12 billion from the Permanent Fund Earnings Reserve Account, which has about $18.4 billion in it, into the constitutionally protected corpus of the fund. That means future legislators would not be able to get their hands on it.

A bill moving in the House, HB 31, sponsored by Rep. Jonathan Kreiss-Tomkins, does essentially the same thing.

Neither House nor Senate budgets appropriate funds for education for the fiscal year that starts in July, but the Senate’s budget affirms that forward-funding decisions made last year for education in 2020 are approved by this year’s body.

The governor has taken issue with this approach, saying that constitutionally no appropriation has actually been made. This appears to be a point of contention that could end up at the Alaska Supreme Court and leave schools without funding while the court decides whether “forward funding” of education can occur when there is no money to actually appropriate.

For education, both bodies appropriated funds for the 2021 fiscal year, another year of “forward funding.”

“This budget protects the Permanent Fund for future generations of Alaskans, grows the economy, and keeps Alaskans safe,” said Sen. Bert Stedman, R-Sitka, co-chair of the Senate Finance Committee. “The nine-member Senate Finance Committee – representing diverse viewpoints across our vast state – produced a budget Alaskans can be proud of.”

Even the Senate’s most argumentative member, Sen. Bill Wielechowski, stood to praise the budget process, the inclusiveness of the Republican majority, and said he would be a yes vote on the budget, the first time in his 16 years in the Senate. He reminded his colleagues of the work Stedman had done in past years on the budget that preserved billions of dollars, money the state has been living off of for the past few years because of Stedman’s forethought.

Sen. Natasha von Imhof, co-chair of senate Finance, said she was voting for the budget even while having misgivings about funding the entire statutory amount of the dividend, at the expense of programs and services.

Sen. Tom Begich also rose to praise the process, acknowledgeing that the budget would face the veto pen of the governor, once it has gone through conference committee with the House.

The governor has proposed a budget that is $1.03 billion smaller than that offered by Gov. Bill Walker in 2018. After conference committee comes up with a final budget to present to him, he is likely to restore most of the cuts that he proposed in February with his amended budget. Although no one really knows how much he’ll cut.

Tuesday is the first meeting of the conference committee, which is 10 days from date of adjournment, May 15.

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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

  • What would the actual budget be if education was funded based upon previously budgeted but unappropriated funds? Giving us numbers of a partially funded budget tells us made up numbers that mean nothing, other than our elected officials are simply declining to do the job the ran for and were elected to do.

    The fact that so many of the hard left in the senate approve of this budget, especially Wielechowski, after 16 no votes…maybe the fully funded dividend brought him over. But when you don’t account for the most costly budget item and say we are cutting the budget, I have my doubts and they are serious doubts.

    I really hope Governor Dunleavy has enough red pens available to use his line item veto.

    • Well Steve-O, probably the most hard left Senator (Jesse Kiehl) voted no on this Senate version and his reasoning was that it was not a balanced budget. That fact was left out of your above post but who cares about a $billion, right?
      Probably too soon to tell how this shakes out in conference committee but my guess is that the PFD gets reduced from here and who knows what sort of deal may be worked out with Dunleavy. They probably get the $12 billion into the corpus of PF that will make this extremely difficult to repeat next year. Who knows about bonded indebtedness and Medicaid?
      The idea of “free money” was too much for even reasonable people to see beyond that new ATV or snow-go sitting in those showrooms IMO. Might just take a year to see the increased local govt. taxes to give folks a reality test, also IMO.

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