Bill addressing vetoes, dividend emerges in special session
JUNEAU, Alaska (AP) — The Alaska House’s budget-writing committee advanced legislation Monday that would restore significant funding vetoed by Gov. Mike Dunleavy and pay residents a dividend of up to around $1,600 this year.
House Finance Committee co-chair Rep. Neal Foster cast the measure as an attempt at compromise.
House Minority Leader Lance Pruitt didn’t see it as such. “It does not meet the desire of the minority,” Pruitt, an Anchorage Republican, said.
The current special session, which began July 8 and was marred early on by a dispute over the proper meeting location, features some of the same big issues lawmakers have been struggling with for months: state budgets and the size of the dividend residents should receive this year from the earnings of the state’s oil-wealth fund, the Alaska Permanent Fund. Minority support in the House is seen as important to reaching an ultimate resolution.
On Monday, the House, on its second attempt in two days at passing a fully funded infrastructure budget, came up one vote short of the required threshold.
The capital budget would use constitutional budget reserve funds. In the House, that requires at least 30 votes and means the 23-member bipartisan majority needs buy-in from Republicans who are in the minority or not affiliated with a caucus.
Language in the capital budget also seeks to prevent money in various accounts, for things such as student scholarships and rural electric costs, from going into the budget reserve to help repay money that has been taken from it.
Supporters picked up four votes compared with Sunday’s tally, with three of the seven minority Republicans who were absent Sunday back and voting in favor of the reserve fund provisions. Pruitt, a “no” Sunday, changed to “yes.”
Some minority members argued Monday that provisions in the capital budget allowing for additional draws from the reserve fund were too broad and complicated.
House Finance Committee co-chair Rep. Jennifer Johnston said the provisions allow up to $250 million to be drawn for unforeseen costs and what she called standard language to ensure the budget is balanced if revenues do not meet projections.
Lawmakers could try to revive the measure for another vote. It previously passed the Senate.
“We are not giving up hope,” House Speaker Bryce Edgmon said in a statement. “We thank everyone who voted for the capital budget and for the growing commitment to find compromise on this issue and the many other challenges ahead.”
Dunleavy, a Republican who took office in December, and minority House Republicans have supported a dividend this year of around $3,000, in line with a statutory formula some see as unsustainable. Dividends traditionally have been paid using permanent fund earnings, which lawmakers last year also began using to help pay for government expenses amid an ongoing deficit. A law passed last year seeks to limit what can be withdrawn from fund earnings for dividends and government.
The bill that advanced from the House Finance Committee Monday seeks to stay within those bounds and would draw from another reserve fund, the statutory budget reserve, to pay a dividend of around $1,600 per resident. Foster said the statutory budget reserve is among the accounts that could be swept into the constitutional budget reserve unless the capital budget language is approved. Without the money from the statutory budget reserve, the dividend would be around $1,300 per resident, he said.
The bill also would restore $110 million of the $130 million Dunleavy vetoed for the University of Alaska system and restore many other vetoed items. On Monday, the Board of Regents voted to allow administrators to expedite layoffs of tenured faculty, end programs and take other measures to cut expenses.
If the bill passed, Dunleavy could still use his veto powers to strike spending. It takes at least 45 of the Legislature’s 60 members to override a veto, a threshold lawmakers failed to reach earlier this month.