Alaska House presses plan to reject Gov. Mike Dunleavy’s budget

JUNEAU — The Alaska House of Representatives will begin debate Tuesday on an alternative to Gov. Mike Dunleavy’s state operating budget after the House Finance Committee discarded most of the cuts proposed by the governor. The alternative is a plan that preserves state services at the cost of the Permanent Fund dividend.

With the Legislature unlikely to advance new taxes, this year’s budget debate is a binary one: Preserve state services such as education and health care at the cost of the dividend, or reduce the dividend in favor of those services.

The proposal in front of the House this week is for a $10.22 billion state operating budget plus a Permanent Fund dividend of about $1,300-$1,400 per person, according to figures from the nonpartisan Legislative Finance Division. Thus far, the House has not explicitly stated its dividend proposal, but the unappropriated amount of money in the budget equates to that level of dividend, said David Teal, director of the finance division.

The governor’s proposal was for $8.8 billion in spending (according to the finance division) plus a dividend of about $3,000 per person.

Either budget would be less than the current year’s $10.33 billion in spending, and either would balance the state’s chronic deficit — but they differ in priorities.

The governor proposed significant cuts to K-12 education, university and health care spending that have been rejected by the House Finance Committee. The governor’s budget, for example, proposed cutting $134 million of the state’s $327 million funding for the university system. The finance committee settled on a $10 million cut instead.

The finance committee is proposing a $58 million cut to Alaska’s $2.25 billion Medicaid program instead of the $249 million cut to state funding initially proposed by the governor.

State support for public broadcasting has been preserved by the finance committee; it was cut entirely in the governor’s proposal.

Rather than use the governor’s budget as a starting point, members of the finance committee were told to use a flat-funded budget as their starting point, then decide whether or not they wanted to incorporate the governor’s cuts.

“All of the governor’s proposals were taken up, debated, and given an up or down vote in subcommittee,” said Rep. Neal Foster, D-Nome and co-chairman of the House Finance Committee.

Speaking on the House floor, Foster said, “We don’t typically use the governor’s budget as the starting point,” but for the past two years — with former Rep. Paul Seaton, R-Homer, in charge of the finance committee — lawmakers did exactly that.

Foster clarified after the floor session, saying, “The past two years, Seaton did use the governor’s, so we certainly can do that, but eight out of the past 10 years, we started with the base budget.”

In a possible preview of the passionate debates to come later this week, members of the House’s Republican minority objected to the budget process Monday and said lawmakers should start over with the governor’s budget as the base, and then legislators could vote whether or not to restore funding for various programs.

Though that might not be the traditional approach, “I think this is a different year," said House Minority Leader Lance Pruitt, R-Anchorage, after the floor session. “We’ve been asked to not go with the status quo. I think people told us that status quo is not acceptable.”

In town hall meetings and constituent forums across the state, lawmakers have been confronted by Alaskans urging them to restore funding to programs the governor plans to cut. According to figures provided by the coalition majority that runs the House, testimony in a series of roadshow presentations was five-to-one against the governor’s budget proposal.

Some Republicans, including the governor, have said they’re not sure those meetings represent a true cross-section of public opinion. They say people affected by cuts are likely to be the most motivated to speak out, and they refer to the results of the November election, which sent Dunleavy to the governor’s office with 51 percent of the vote.

Rep. David Eastman, R-Wasilla, spoke fervently against the House’s alternative budget proposal Monday.

“This is a job destruction bill. It does not reflect the revenues, and it does not reflect what the people of Alaska have asked us to do,” Eastman said.

Eastman and others discontented with the finance committee’s alternative will have a chance to offer amendments starting Tuesday, and that process is expected to continue through at least Thursday.

The goal, Foster said, is to finalize the alternative and transmit it to the Senate for consideration by Sunday.

He said to expect members of the majority to offer amendments as well. In particular, majority members are expected to call for the reversal of one of the biggest single cuts made by the finance committee. That cut involved the elimination of state assistance for school construction and renovation projects.