Alaska Senate again delays budget vote with 1 day remaining in legislative session

JUNEAU — Alaska Senate leaders said Tuesday that they would hold off on voting to advance their budget proposal to the House of Representatives for consideration until Wednesday — the final day of the legislative session.

Senate President Gary Stevens, R-Kodiak, said the 17-member Senate bipartisan majority had decided not to pass a spending plan to the House unless House leaders agreed to approve the plan with no changes.

The House passed a proposed spending plan to the Senate last month, but amid a disagreement on the size of the Permanent Fund dividend, the Senate has repeatedly delayed its timeline for passing their version of a budget in an effort to pressure the House to either agree to the Senate proposal or force a special legislative session.

“The biggest obstacle is their insistence on a major draw from our savings account,” said Stevens. “That’s the issue.”

The House has continued to advocate for a $2,700 dividend that would require a draw of hundreds of millions of dollars from the state’s main savings account. But drawing from the Constitutional Budget Reserve requires a three-quarters vote from both bodies — a threshold both House and Senate members say is unlikely to be met. The Senate’s plan includes a $1,300 dividend that would balance the budget with no draw from savings.

The high vote threshold for accessing the Constitutional Budget Reserve has precluded efforts to agree on a midpoint between the House’s dividend figure and the Senate’s, because increasing the dividend by any amount would require either a cut in other areas of the budget or a draw from savings.

“Personally, a small draw — I might consider — but others are not considering any draw at all,” said Stevens.

“I think we want as big a dividend as possible. The question is, how do you pay for it?” said Senate Rules Chair Bill Wielechowski, D-Anchorage. Other than drawing from the Constitutional Budget Reserve, the Legislature could also fund a dividend with new revenue measures, drawing from the earnings account of the Permanent Fund, or cutting spending on state services. But lawmakers haven’t been able to agree on any of those options, Wielechowski said.

Typically, legislation advanced from one chamber to the other must sit on lawmakers’ desks for a full day before they can vote on it, but Wielechowski said that House members could vote to bypass that rule in order to accept the Senate’s budget if the chambers reached a last-minute deal in the final day before the deadline.

Both the House and Senate are scheduled to meet at 11 a.m. Wednesday.

With less than 48 hours until the constitutionally mandated deadline for the end of the session, lawmakers in both the House and Senate held meetings with Gov. Mike Dunleavy. If they fail to pass a budget by the end of the day Wednesday, Dunleavy may call them to a special session to continue working on the budget. That session could begin immediately or in June. Lawmakers must agree on a spending plan before June 30 or Alaska will be forced into its first government shutdown, with unknown consequences for critical state services and public employees.

“Gov. Dunleavy has been meeting with legislators on both sides of the aisle, and he hopes they will come up with a resolution between now and tomorrow. The governor has always advocated for a budget that funds core services and provides a fair dividend,” spokesperson Shannon Mason said in an email.

Mason didn’t respond when asked if and when the governor would call a special session if lawmakers do not agree on a budget before the session ends.

According to Stevens, part of the Senate majority’s motivation for holding on to the budget is to give them more negotiating power with the House if a special session does occur.

“I am concerned about sending a budget to them leading into possibly a special session,” said Stevens.

Aside from the size of the dividend, Wielechowski said House leaders had also expressed interest in passing a new spending cap and a measure that would constitutionally guarantee the annual dividend payment. But neither measure had come close to a floor vote in the House amid disagreements within the Republican-dominated majority caucus.

“The challenge is their ability to get that to us for us to consider. We said, ‘Send it over,’” Wielechowski said. “There’s just some timing issues in their ability to get them to us.”

Correction: An earlier version of this story incorrectly reported the threshold for drawing from the Constitutional Budget Reserve. Three quarters of both the House and Senate must agree to a draw, not two thirds.