The Alaska House passed its version of the operating budget on Thursday, containing an unusual number of changes proposed by the members of the House Minority caucus that include additional funding for young students, school meals and road maintenance.
The $12.3 billion statewide operating budget also calls for a $2,270 dividend and about $175 million in one-time education funding, equivalent to the $680 increase to the base student allocation from the education bill Gov. Mike Dunleavy vetoed last month.
“We have one explicit constitutional obligation in this body, and that is to pass a budget,” said Rep. DeLena Johnson, the Palmer Republican who oversees the operating budget as the co-chair of the House Finance Committee. “As I said, I wasn’t thrilled with some of the adds to this budget on the floor, but this is a collaborative product; it’s time to embrace the art of compromise.”
Some of those additions include $9 million for reading assistance for K-3 students, about $480,000 to make more than a million public school meals free for kids on the reduced lunch program, $1.2 million for additional road maintenance to improve plowing in Anchorage and the Southcentral area and a combined $10 million for fishing and tourism marketing.
Despite several wins by the House Minority Caucus, the budget passed along political lines on a 23-17 vote. All members of the Republican-led Majority voted for it, while every non-majority member voted against it.
Several members of the House Minority said that while the budget is technically balanced, it overspends when considering the state’s capital budget and the cost of other bills that are expected to pass this session. They warned that they were once again giving the Senate the upper hand in shaping state spending this year.
“This budget is unrealistic. This budget is based on fantasy, and it does not set us up for success in the next few years or in future generations,” said Rep. Cliff Groh, D-Anchorage. “This budget is hundreds of millions of dollars out of balance. Revenues could fix this problem.”
Several members of the House Minority also complained about the lack of spending to address the state’s high energy costs, ranging from weatherization projects to grid upgrades. Members of the House Majority argued that there are still other opportunities to address energy issues through separate legislation or the capital budget.
Senate leadership has not been shy about warning that the House’s budget, particularly its larger-than-usual dividend, isn’t likely to survive the process. In recent years, the Senate has advocated for a dividend that spends about 25% of the spendable investment income from the Alaska Permanent Fund, about $1,300, with the rest going to state government services. Under that scenario, the budget would balance without the need for additional revenue or additional cuts.
Following the vote on the operating budget, the House also considered a proposed constitutional amendment that would require the state to pay dividends according to the formula in state law. The amendment itself was silent on the size of the PFD, simply pointing to whatever state law is on the books.
Republican supporters of the change argued that it would force the Legislature to finally make changes to the long-ignored statute and address the wider fiscal plan. Many other legislators were skeptical Republicans would actually take the lead instead of just blocking changes and forcing the state to spend several billions of dollars it doesn’t have, likely at the expense of other constitutional mandates like public safety or public education.
The constitutional amendment, which had been on the House floor calendar for nearly two months, needed 27 votes to pass but only received 22.
