The Alaska House is set to begin floor amendments on the state operating budget today, a multi-day process that stands as one of the marquee events of the legislative session. Any legislator can propose any change to state spending, which has made for tense floor fights over school funding, the dividend and just about any other issue in Alaska.
It’s later than usual. A decision made between the House and Senate after last year’s process saw the Senate gain the upper hand and dictate much of the budget’s parameters. Still, the narrow divisions in the House and the infighting of the Republican-led Majority don’t exactly inspire confidence that this process will go smoothly over the next few days.
The central question moving forward is just how much room there really is in the budget. As it stands now, the House operating budget leaves about a $100 million surplus while paying out a dividend of about $2,700. But as many have pointed out, that doesn’t leave much room for a load of other costs that will come due. That includes the capital budget, which is still in the Senate, and the cost of bills passed during this session. The broadband access grant bill has a $40 million price tag that is not reflected in the budget, for example, and the House GOP’s education bill calls for more than $40 million in new home-school funding.
There’s also the question of what the state needs to do with the U.S. Department of Education’s demand that the state pay back the $29 million it allegedly shortchanged several districts during the pandemic.
Senate Finance co-chair Sen. Bert Stedman, the Sitka Republican who played a crucial role in getting the advantage over the House last year, brought this up at a news conference last month and pointed to the most likely eventuality: A smaller dividend.
“At the end of the day, I think there needs to be some consideration from the entire finance committees, both the House and the Senate, of what’s not in the budgets and how we wrap these up,” he said. “Those who are expecting a large dividend, I would caution that that’s probably not going to happen because we have not seen the entire package of expenditures that we’re obligated to spend on.”
By cutting the dividend down to the roughly $1,200 range that it has been in recent years, which represents about a quarter of the spendable revenue from the Alaska Permanent Fund, the state would have money to cover a much larger capital budget and key legislation. However, the House Finance Committee flirted with an even larger dividend by overspending the Alaska Permanent Fund — a potential red-alert moment for the future of the state’s golden goose — but eventually balked when it became clear that it wasn’t just talk and could happen.
Still, the House Finance Committee made some significant changes. Over the last two weeks, the House Finance Committee worked through its budget amendments, approving a whopping 19 amendments by members of the House Minority.
A complete list of the changes can be found here, but here are the big-ticket items that caught my attention in this process:
- $4 million for the city of Anchorage to keep what was set up as its emergency cold weather shelter open year-round. Without the funding, the shelter is set to close at the end of the month and take between 150 and 200 beds offline. The committee initially rejected the money, but that action was rescinded, and the money was included in the budget.
- A $598,600 cut to the Alaska Gasline Development Corporation, cutting what is essentially the executive pay of the public corporation’s two top executives. It was a particularly interesting move with broad bipartisan support for the cut, with several Republicans noting that they’ve been incredibly frustrated with what they have felt is middling progress on a gas line and over promises.
- School funding contingency language, which keeps a funding floor equal to a $680 increase to the base student allocation. Initially, the budget had contingency language that said if any BSA increase passed through law, then the entirety of the one-time money would come out of the budget. This would split the difference if the Legislature passes a smaller increase. Still, either path would have to survive the governor’s veto pen.
- Cuts the entirety of the $5 million for the controversial Alyeska Reading Academy and Institute, a poorly justified reading center in Anchorage pitched by the Dunleavy administration. Just what it’s supposed to be doing isn’t entirely clear. Is it a teacher training center? A direct student tutoring center? A little bit of both?
- $1.2 million for public broadcasting, specifically targeted to radio stations in the state’s least-populated areas. Funding for public broadcasting has been one of the governor’s favorite targets for cuts and vetoes.
- $7.5 million in grants to support Alaska’s child care system. The money is intended to help raise the pay of child care workers by at least a dollar an hour, which recognizes that despite the high costs of child care, it hardly provides a living wage.
- $2 million in additional grants for adult day services.
- $518,000 to increase the Medicaid coverage rates for autism services. While other Medicaid rates have been adjusted for inflation since 2018, autism services have been left behind. This additional funding is intended to bring it up to parity.
- A $278,000 cut to positions related to investigative grand jury proceedings. This move comes after the high-profile kangaroo court that was a Kenai grand jury’s perjury charge against a retired Alaska judge dominated the headlines. That case ultimately led to a stinging dismissal by an Anchorage Superior Court judge, who criticized the process as deeply flawed and pointed to the failures of the state-hired special prosecutor in the case.
- $20 million in backstop funding for the Alaska Marine Highway operations.
- $3 million to the University of Alaska to continue and expand pilot programs to prepare teachers and health care workers for working in Alaska. The money would be evenly split between the two programs, which are mainly operated through student grants.
- $1 million for safety upgrades at the University of Alaska Anchorage.
- $20 million for the University of Alaska Fairbanks to achieve the sought-after R1 Research Status, which officials hope will lead to higher enrollment and additional research grants.
- $20 million in community assistance grants, which are no-strings-attached money given directly to communities. Once a vital part of the budget’s assistance for local communities, the money has been reduced greatly in recent years.
- $15.5 million for the state’s Disaster Relief Fund. Legislators are grappling with unexpected bills that come due in the state’s supplemental budget, which makes for murky budgeting from year to year. This is intended to roughly reflect the average annual spending with the hope that legislators can avoid a nasty sticker shock next spring.
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.
