Budget committee proposes up to $3,850 in payments to Alaskans after dramatic negotiations

JUNEAU — A budget committee has put forward a spending plan that could include up to $3,850 in payments to Alaskans, ending tense negotiations that began after the House rejected the Senate’s plan to send residents $5,500.

Members of the conference committee tasked with crafting a budget palatable to both the House and Senate held negotiations that lasted late into Monday night and resumed early Tuesday morning to reach the budget compromise, as committee members thwarted effort to slow their progress by barricading doors and moving swiftly to reach an agreement before the clock runs out.

The committee’s spending plan finally became official during a meeting Tuesday afternoon, less than 36 hours before the Wednesday midnight deadline by which the session must end. If they do not agree on a spending plan by then, they may be forced to enter a special session.

With the deadline nearing, the committee meeting was not without a hefty dose of drama. Partway through proceedings, committee Chairman Sen. Bert Stedman, R-Sitka, instructed staff member Pete Ecklund to barricade the door, trapping all six committee members — in addition to staffers, journalists and others — in the room. The barricade remained in place for several minutes as committee members continued their work.

The instruction came from Stedman after Rep. Kevin McCabe, R-Big Lake, put a call on the House, which would have forced the committee members from the House to return to the House floor and slowed the committee’s work.

“We don’t have time to stop and waste an hour or two, or we won’t have a budget by the deadline,” Stedman said after the committee meeting ended.

It wasn’t the first time Stedman resorted to barricading committee members to ensure their work would get done on Tuesday. Earlier in the day, Sen. Natasha von Imhof, R-Anchorage, placed a call on the Senate while committee members were holding closed-door negotiations. According to committee member Sen. Bill Wielechowski, D-Anchorage, Stedman barricaded a door to keep the sergeant-at-arms from entering the room and disrupting their discussions.

“If the whole thing dies, we need to start all over again, and we don’t want to risk that,” Wielechowski said.

When security officers arrived with the sergeant-at-arms, they knocked down the door. Committee members proceeded to finish their discussion with security officers standing by, waiting to escort the Senate members to the floor.

Stedman said the main challenge for the committee was reaching an agreement on the dividend amount. Under their proposal, the budget would include a $2,550 Permanent Fund dividend — half of the 5% draw of the Permanent Fund’s overall value that lawmakers, under an endowment-style management plan, have designated for spending. That is double what the House proposed in the budget they passed last month, but far less than the $4,200 full statutory dividend advanced by the Senate last week.

In addition, the budget includes $1,300 in energy relief payments. But under the committee’s plan, half that money — around $420 million — would have to come from the state’s Constitutional Budget Reserve. Accessing that savings account requires a three quarters vote by each body, meaning 30 House members and 15 Senate members must vote in favor of the spending. If that vote fails, Alaskans will receive only $650 in energy relief checks.

The plan concocted by the committee would leave around $750 million for forward funding of K-12 education. It would also put around $800 million in the Statutory Budget Reverse account by the end of the next fiscal year, if oil prices remain close to the Department of Revenue’s most recent projection of $100 per barrel.

The House and Senate are expected to take up final votes on the budget late Wednesday.

Lawmakers said Tuesday they expected the budget to pass. And while the dividend amount will be lower than the $5,500 figure advanced by the Senate, the amount proposed by the conference committee would be the highest dividend in the history of the Permanent Fund.

But without a lasting solution to the Permanent Fund dividend calculations, some warned that similar nail-biter budget negotiations will remain a fixture in the legislative process.

“Unfortunately, what will continue to happen unless we have the dividend in the Constitution is you’re going to see a ping-pong, up and down, depending on who’s in power and who has the votes,” Wielechowski said. “On an issue like that, it should be something that the people can rely on, something that’s consistent.”

While budget negotiations carried on, the House and Senate held morning-to-night sessions Tuesday in which they considered key pieces of legislation, waiving and sidestepping rules in an effort to pass bills ahead of the Wednesday deadline.

Among those bills was the Alaska Reads Act, which was tacked on to another bill during a Senate floor session in a move to circumvent the House committee process. The measure, which would establish reading programs and early education funding, stalled last week in the House Education committee, where House majority member Rep. Tiffany Zulkosky, D-Bethel, joined minority members in voting against it. Zulkosky said it would unfairly treat Alaska Natives and students for whom English is a second language. By adding the bill as an amendment to an existing House bill and voting to pass it, the Senate ensured it will be sent directly to the House floor.

“This bill is too important for one person” to block it, said Senate Minority Leader Tom Begich, D-Anchorage. He added that Gov. Mike Dunleavy has told him he would support other education funding in the budget if the reading bill passed.

Dunleavy, a Republican, has remained silent as the Legislature nears its budget deadline. A spokesperson for the governor on Tuesday declined to say whether Dunleavy would support the budget advanced by the conference committee if it passes the Legislature.

Dunleavy, who has the power to veto the entire budget or parts of it, has previously said he wanted a dividend of at least $3,700 this year.