Alaska House finalizes budget amendments after minority walkout and heated floor fights

JUNEAU — The Alaska House of Representatives finalized amendments to the operating budget Thursday after the Democrat-dominated minority caucus staged a dramatic walkout Wednesday over education funding.

The House adopted a budget amendment Monday on a 39-1 vote to pay a one-time $175 million boost to schools outside of the Base Student Allocation, the state’s per-student funding formula. The House majority proposed changing the funding source for that increase Wednesday from the state treasury to savings, which requires a three-quarters approval vote by both legislative chambers.

House majority leadership said that Wednesday’s funding change was prompted when the minority proposed an amendment to have half of the $2,700 Permanent Fund dividend in the budget paid from the Constitutional Budget Reserve, the state’s main savings account. Minority members needed to support drawing from savings, and they threatened to withhold it, which has become a routine threat from minority caucuses to extract leverage for their priorities.

With accusations that school funding was being held hostage, most members of the Democrat-dominated House minority caucus left the Capitol for three hours Wednesday to an undisclosed location. Progress on the budget halted before the minority returned and introduced a series of previously rejected amendments and procedural motions, which caused delays that lasted hours.

House Speaker Cathy Tilton, R-Wasilla, ended the heated floor session Wednesday shortly after 6 p.m. The House convened Thursday morning and continued debating the contentious education amendment, largely free of drama.

House Minority Leader Calvin Schrage, an Anchorage independent, said there was some lingering frustration from Wednesday’s floor fights. But the minority would continue to push for more public school funding — its top legislative priority — with education advocates saying that years of flat funding had left the system in crisis, he said.

“We want to move forward and be productive for Alaskans and address those issues that we can, and having an acrimonious and hostile relationship isn’t helpful to that end,” he said.

Tilton said “people get really passionate” on the floor and that the overnight break had helped cool tensions. Fairbanks Democrat Ashley Carrick apologized Thursday for “escalating tensions” after she made a motion to be excused from voting on the education amendment Wednesday evening. Rep. Will Stapp, R-Fairbanks, made a similar apology after he slammed his microphone down.

After Wednesday’s walkout and heated floor fights, several House majority freshmen wore lapel pins on the floor depicting a popular internet meme of a smiling cartoon dog surrounded by fire. “This is fine,” the dog says ironically.

During Thursday’s largely smooth floor session, majority members said that there was a commitment for extra one-time education funding, and that debates about a permanent school formula funding increase would likely continue next year. Minority members said it was not prudent to use savings to pay for core government services.

The contentious amendment was adopted Thursday along caucus lines on a 23-17 vote. All members of the Republican-led majority supported it and all members of the Democrat-dominated minority voted were opposed. Wasilla Republican David Eastman, who doesn’t sit with either caucus, also voted against the amendment.

The House’s budget would create a roughly $600 million deficit, driven in part by the House majority’s support for a $2,700-per-Alaskan dividend. That would require drawing down the $2 billion Constitutional Budget Reserve.

Majority members said that draw from savings would incentivize lawmakers to continue working on a long-term fiscal plan to balance the budget, potentially with a new dividend formula and new state revenues. But no new revenue bills have advanced to the House floor for a final vote.

The majority’s amendment tied the three-quarters vote to fill the deficit and pay for the dividend with the one-time funding boost for education. Despite that, Schrage said Thursday that supermajority vote may still fail when the House votes to advances the budget to the Senate.

“I don’t see a large willingness to spend from savings without a fiscal plan,” he said.

The House and Senate typically pass different versions of the budget and then reconcile those differences through negotiations, so a single budget bill can pass through both legislative chambers and onto the governor’s desk.

The Senate has strived to craft a budget that doesn’t require drawing from savings, and signaled its support for a $1,300 dividend and a substantially larger permanent school funding increase. If a draw from savings is included in the final budget bill, the House would get another chance to approve the three-quarters vote.

Tilton suspected “there’s lots of reasons” why majority members had supported the amendment to draw from savings for extra education funding. Stapp, a member of the House Finance Committee, said that would help the majority in fighting for its priorities when budget negotiations begin with the Senate.

“The priorities of the caucus that I’m in with Republicans is they want to fight for a 50-50 dividend,” Stapp said.

Several members of the Republican-led House majority have long supported following the 1982 statutory dividend formula, which would pay roughly $3,400 per eligible Alaskan. The $2,700 dividend in the House’s budget was pitched as a compromise, along with the extra one-time funding for schools.

The House had planned to advance the budget to the Senate before the Easter weekend. Tilton said lawmakers would take the weekend off and convene Monday to debate the budget bill itself. But it’s unclear if it would advance on the same day.

“We’ll see how that goes,” Tilton said.