Alaska House passes alternative budget, rejecting most Dunleavy cuts, and dodges PFD vote

JUNEAU — Over the objections of its Republican minority, members of the Alaska House of Representatives voted 24-14 to approve a $10.29 billion state operating budget and send it to the Alaska Senate for consideration.

Lawmakers voted to close debate on the budget without setting a precise amount for this year’s Permanent Fund dividend. That amount will be set in separate legislation, said Rep. Neal Foster, D-Nome, the finance committee co-chairman in charge of the operating budget.

In February, Gov. Mike Dunleavy proposed a budget built around his desire to fund a “full dividend” paid using the traditional formula in state law. He suggested broad cuts to state services in order to pay that dividend without spending from the state’s savings accounts.

The House has rejected that plan. Instead, it is proposing a smaller cut to state services and a lower dividend. As with the governor’s budget, it balances the budget without spending from the state’s savings accounts.

“We cut $200 million from the prior year’s budget. That’s very substantial,” Foster said. “We did not cut $1.6 billion because the people of Alaska told us that deep cuts to education, health care, the marine highway system and so much more — folks told us those were a little too much to accept in a single year.”

The House’s proposed operating budget rejects plans by the governor to take a full share of the state’s petroleum property tax and fisheries taxes. Those taxes are shared 50-50 with relevant communities, which have criticized the governor’s proposal.

In February, the governor proposed cutting Medicaid spending by $249 million; the House approved $58 million in cuts. For K-12 education, the governor proposed about $315 million in cuts from a budget of $1.66 billion; the House approved none. The governor proposed cutting $95 million from the $140 million budget for the Alaska Marine Highway System; the House approved $10.9 million in cuts.

Before the final budget vote Thursday, members of the House minority unsuccessfully attempted to force votes on 20 remaining budget amendments.

According to a list of all 69 proposed amendments, several of the remaining items would have prompted votes on the dividend. Instead, lawmakers advanced to a vote on the budget without considering those items. The ignored amendments included some from the majority as well as the minority.

The action directly contradicted a statement from the speaker of the House on Tuesday: “As is tradition, we will entertain all amendments, no matter the length of time involved,” the House speaker, Rep. Bryce Edgmon, I-Dillingham, said at the time.

After the final vote, Edgmon was asked about that pledge.

“I think there’s a general understanding in the Capitol that (the Permanent Fund dividend) deserves standalone consideration,” he said. “The decision was made to move forward and to keep on the schedule to adjourning to a timely manner.”

House lawmakers had said they wanted to transmit their budget proposal to the Senate before Sunday, the 90th day of the regular legislative session. The constitution allows for 121 days if needed.

Members of the Republican minority objected to a final vote without considering all amendments.

“I guess I would just have to ask: What are you afraid of?” said Rep. DeLena Johnson, R-Palmer.

The House spent multiple days considering amendments; lawmakers began floor debate Tuesday and concluded just after noon Thursday. The amendments ended up adding about $70 million to the budget proposal crafted by the House Finance Committee. Even with those additions, the budget would be smaller than the current year’s budget.

Members of the House Republican minority, in addition to their complaints about the budget process, said the suggested cuts are insufficient.

“This is a long ways away from the sustainability that’s needed,” said House Minority Leader Lance Pruitt, R-Anchorage. “This is a status quo budget. You can make a few tweaks, but this is a status quo budget.”