After a multi-day amendment process where the House Finance Committee heard more than 80 amendments, the state’s operating budget is headed to the House floor for an amendment process that could last much of this week.
The House Finance Committee ultimately adopted just a handful of changes to an operating budget that was largely unchanged from what Gov. Mike Dunleavy first proposed. The biggest change is the move from a full, statutory dividend to one that pays half of the spendable earnings of the Alaska Permanent Funds as dividends and sends the other half to the state government.
That change moves the dial on the state’s deficit but leaves a deficit nonetheless. Where under revised revenue forecasts, the governor’s budget contains a nearly $1 billion deficit the House budget is closer to about $410 million (though that doesn’t include any increase to education, which is moving forward in separate legislation).
To address that, the final amendment adopted before the budget left the committee was one proposed by House Finance co-Chair Rep. DeLena Johnson, R-Palmer, that would cover the deficit with a draw from the state’s savings account, the Constitutional Budget Reserve. The vote requires a three-quarter vote from both chambers, a critical piece of leverage that likely won’t be secured until negotiations between each chamber are resolved. Johnson lamented about spending out of savings but said it’s a last resort.
“A CBR draw is only a band-aid and one we need to stop reapplying. Our constituents deserve certainty in the PFD, essential services they rely on, a strong capital budget as well as the preservation of our savings,” she said. “The only way to achieve that is a complete fiscal plan. That means continued downward pressure on the government—spending—new revenue sources, and major structural reform. This committee has done its best with the budget we were given.”
Members of the bipartisan Minority Coalition, who had backed a smaller dividend, weren’t exactly sympathetic to the majority’s plight but didn’t stand up in opposition to the amendment or advancing the bill. Instead, they noted that the budget would have been balanced with a smaller dividend and that there’s never a good time to make tough decisions.
“There’s never gonna be a good time—there’s not going to be a good time to make the tough decisions,” said Ketchikan independent Rep. Dan Ortiz. “We could have made the tough decisions on the amendment (for a smaller PFD), and we didn’t.”
For all the Majority’s talk of wanting to work for a fiscal plan, legislators noted the old House Majority Coalition did pass one back at the tail end of Gov. Bill Walker’s term (the POMV draw, a reworked PFD formula and an income tax).
“I’ve been there and am still here,” said Rep. Andy Josephson, D-Anchorage, of the politically challenging votes on a fiscal plan. He expressed interest in continuing to work on the fiscal plan but noted the Republican-led Majority needs to take some leadership on the issue.
What’s next
The House budget amendment can be, as it’s been in recent years, essentially a free-for-all where any member regardless of political affiliation can offer as many amendments as they want.
What’s going to be interesting is to see what the chamber’s far-right members—including, but not limited to, Rep. David Eastman—may have in store. Interestingly, they don’t have much representation on the House Finance Committee, which is filled by more moderate (in relative terms) Republicans, who believe in things like paying people more to do challenging jobs and inflation.
The House Finance Committee also managed to largely steer clear of deeply controversial issues like abortion (a particular favorite of Rep. Eastman) or other issues that can crop up in the non-binding language amendments.
The House Finance Committee did, however, vote to shift funding away from a proposed takeover of federal wetlands permitting to early education and cut $209,000 the governor had sought for a “parental rights advocate” in the Department of Law that could help families begin lawsuits against school districts. On both of those amendments, the Republicans on the House Finance Committee were overruled when non-Republican Majority Reps. Bryce Edgmon, I-Dillingham, and Neal Foster, D-Nome, sided with the Minority Coalition.
Reversing either of those changes could be a tough sell on the House Floor, but it’s likely that Republican members will try.
Stay tuned.
Matt Acuña Buxton is a long-time political reporter who has written for the Fairbanks Daily News-Miner and The Midnight Sun political blog. He also authors the daily politics newsletter, The Alaska Memo, and can frequently be found live-tweeting public meetings on Twitter.
