Wasilla state Sen. Dunleavy risks exile from caucus as Alaska Senate approves budget

JUNEAU — The Alaska Senate passed its budget 15-5 late Thursday, with the caucus-line vote turning dramatic when Wasilla Republican Sen. Mike Dunleavy risked a divorce from the GOP majority.

Dunleavy, who failed to convince his Republican colleagues to cut much beyond a 5 percent reduction to schools and the university system, initially voted against the budget — a violation of the majority's rules that would typically lead to his ejection from the caucus.

But Dunleavy's fate remained uncertain Thursday evening after he switched his vote when the measure came up for reconsideration. That switch, he said, was accidental.

Senate President Pete Kelly, R-Fairbanks, would say only that Dunleavy would be treated "generously and compassionately."

"He's our friend," Kelly said.

Dunleavy said he made up his mind to oppose the budget this week after the Senate's latest proposal emerged from the finance committee. Senate leaders claimed reductions of close to $300 million — the cut to the state's main category of spending, unrestricted general funds — but Dunleavy said his accounting pegged the reductions at more like $130 million.

After his floor vote Thursday, Dunleavy staged an informal news conference in the room used by the Senate State Affairs Committee.

His ejection from the caucus would likely cost him his chairmanship of that committee, as well as some of his six aides — and possibly his coveted seat on the Senate Finance Committee.

But Dunleavy said he couldn't endorse the Senate's budget, which the majority wants to pair with smaller Permanent Fund dividends to fill most of the state deficit of nearly $3 billion.

Dunleavy has sponsored legislation to retroactively pay the portion of last year's dividend — at a cost of nearly $700 million — vetoed by Gov. Bill Walker. But the Senate Finance Committee hasn't held a hearing on it.

The committee also voted against a dozen of Dunleavy's budget amendments, and approved adding public broadcasting money back into the budget that a subcommittee chaired by Dunleavy had previously cut.

"We need to reduce more," Dunleavy told reporters. "I couldn't find myself voting yes on this budget."

Dunleavy suggested he could maintain leverage over the budget process by potentially withholding his vote to open a key state savings account, the Constitutional Budget Reserve, that requires a three-fourths majority of each chamber to crack. Such a step could further complicate the Legislature's budget negotiations, since without Dunleavy, the GOP majority would have 14 of the Senate's 20 seats, one short of the minimum to spend the savings.

Dunleavy's move also heightened speculation that he's positioning himself for a run for governor next year — an idea floated on social media late Thursday by a couple political observers.

Dunleavy said he wasn't announcing a bid but also didn't rule one out, suggesting that he wants a more avid budget-cutter atop the state's bureaucracy.

"I really believe you could have reduced this government by 5 percent across the board," he said. "But you can't do that as a single senator. The governor has the power to do that."