The Alaska House approved its version of the state operating budget on Monday, a budget plan that includes some boosts for public schools and social services while paying a $1,500 dividend.
Members of the left-of-center bipartisan House Majority said the budget was an effort to preserve the state’s limited savings while using what’s expected to be a moderate boost in oil tax revenue from Trump’s war with Iran to support things like heating assistance, child care, early education and health care.
“We have a dividend this year that is 50% larger than last year’s, which will be real, tangible support for Alaskans,” said Anchorage independent Rep. Calvin Schrage, who is one of the co-chairs of the House Finance Committee. “Is it as much as everyone wants? No? Is it more than some people want? Yes, but it’s a budget that’s done the best it can to strike a balance, to provide support where it’s most needed and to provide support broadly and generally as well.”
The budget includes $147 million in additional funding for public schools, $11 million for student transportation, $17.5 million to restart the state’s heating assistance program, $15 million for rate increases for health care workers, $7.5 million for child care and $4 million for early education grants. The House’s total spending increase on state services is about $245 million.
While the House Majority supported the measure, minority House Republicans were united in their opposition, leaving it to pass by the slimmest of margins on a 21-19 vote.
For their part, the 19 House Republicans seemed to have about 19 different ideas for what the budget needed to look like to garner their support.
There was too much spending in areas like public schools and too little in areas like resource extraction. The budget process wasn’t as thorough as it should have been, and it was a mistake to start with the budget submitted by Gov. Mike Dunleavy (a Republican) rather than starting from zero and justifying every single dollar in the $12.7 billion budget. The PFD was too small for some, while the budget was too big for others. Some claimed the state was seeing “exponential growth,” arguing that every single rejected cut meant less for the PFD. Others questioned the need for inflation-proofing. There was too much social spending in areas they didn’t like, which was turning Alaska into a “welfare state,” and not enough in areas they did, like private-sector businesses.
“A government’s budget should address three priorities: Fiscal restraint, robust public safety, and the protection of Alaska’s resource development,” said House Minority Leader DeLena Johnson, R-Palmer. “Our group put together some really good amendments and tried to get those in.”
To others, the budget process seemed personal, as they decried the House Majority as rude and hyper-partisan for not adopting more of their amendments, including one that would have deleted the $158 million in one-time funding the House Majority had put toward schools and another that would have increased funding for industrial road maintenance.
“I am saddened, especially what I’ve experienced this year, the lack of respect for individuals that sit on the finance,” said Rep. Jamie Allard, an Eagle River Republican who once made waves for yelling at other legislative employees and members of the public.
Johnson even got in it, suggesting House Speaker Bryce Edgmon, I-Dillingham, failed to do his job because more Republican-backed amendments didn’t pass.
“The job of speaker is to be the speaker to the whole body and to ensure that the minority’s voice is heard,” she told Edgmon during the debate (it’s not), explaining that the House Minority kept things tight and focused by only submitting nearly 70 amendments rather than the usual 100-plus. “I’m disappointed that they were voted down. We’re falling short of the responsibility of this body of the legislature to rise above divisiveness and realize that real fiscal achievement is for all Alaskans.”
While House Republicans had previously opposed spending from savings to backstop the current year’s supplemental budget, arguing that the state was awash in cash thanks to Trump’s war with Iran, they said that it was deeply irresponsible to bank on moderately higher oil prices in the coming budget year. That budget is based on the expectation that oil will average out to about $70 per barrel. So far, it has consistently sat around $100.
“We can’t trust the revenue forecasts,” said Soldotna Republican Rep. Justin Ruffridge, who just a month ago argued the state was flush with cash because of the war. “I think that the members who sit in these seats a year from now are going to be saying, man, what were those guys thinking? They really made a budget on $75 a barrel of oil?”
And for much of the Republicans’ complaints about the budget process, majority members noted that many of the problems about budget transparency and accountability start and end with the governor’s office, which is held by Republican Gov. Mike Dunleavy. They noted that things like travel spending, zero-based budgeting (starting from zero), and alleged fraud and waste are all areas where Dunleavy has far more power to change.
“I hear on the floor that we hear from insiders within the administration that travel budgets are inflated, that vacancy rates are too high, and we can just cut those that there’s waste and abuse here and there and everywhere,” said Rep. Schrage. “Where are members getting this information, and if they are getting this, why are they not working with the Administration to make sure these cuts are brought forward?”
Schrage said it’s unrealistic to expect legislators to interview every state employee to uncover these claims of waste.
“No, we need a willing partner to be able to do so,” he said. “I’m not sure all those areas of waste and abuse actually exist, but to the extent they do, it’s very difficult to address when you don’t have a willing partner in the administration.”
He noted that the Legislature tried to cut some $20 million from the state’s prison budget, only for the Dunleavy administration to ignore the request and spend $24 million on overtime anyway.
But in the bigger picture, members of the House Majority argued that, fundamentally, they believe that it’s actually worthwhile to focus spending on helping needy and vulnerable Alaskans. They argued that Alaska needs to do a better job at investing in itself and making life easier for everyone.
“They’re proud to live in a state where we take care of one another,” said Rep. Genevieve Mina, D-Anchorage, of her constituents’ feelings on the budget.
Rep. Andy Josephson, the Anchorage Democrat who spearheaded the budget as the co-chair of the House Finance Committee, argued that he had tried his best to balance the pressing needs of Alaskans while trying to keep the state living within its means. He recalled one meeting with a family struggling to afford in-home care for their daughter because the state’s reimbursement for caretakers hadn’t been updated in nearly 30 years.
“This is an actual need. This budget reflects that need,” he said. “(We) walked out together and I said, ‘We’re doing this.’ So, you know, shame on me if there’s compassion in the budget.”
The budget now heads to the Senate, which will create its own version. Then, the two versions will be expected to meet in a conference committee where legislators can work out the differences before sending it to Gov. Mike Dunleavy for consideration.
Dunleavy has not been shy about using the veto pen and has regularly vetoed measures such as public school funding, school construction, child care and early education.