Alaska House reaches agreement to avert government shutdown

JUNEAU, Alaska (AP) — The Alaska House reached in dramatic fashion Monday an agreement that Gov. Mike Dunleavy said would avert a government shutdown.

House Speaker Louise Stutes indicated the outcome was not assured when she called the House to order, and House Minority Leader Cathy Tilton, who had been negotiating with Stutes, said things were “absolutely, completely close” to unraveling.

Involved Monday was adoption of a statement of the House, calling for creation of a House-Senate working group to make recommendations on a “comprehensive fiscal plan” for the next special session. There also was another vote on the effective date provisions attached to the state spending package lawmakers approved earlier this month. Those provisions failed in the House at that time but squeaked by on Monday.

The new fiscal year starts Thursday.

Legislative leaders had been in negotiations focused on securing the two-thirds support, or 27 votes, needed for the effective date provisions in the House. The House’s 21-member bipartisan majority needed help from minority Republicans to reach that threshold. Some minority Republicans had complained of what they saw as strong-arm budget tactics, and they wanted to be included in discussions about a broader state fiscal plan.

Monday’s votes followed a tense period in which some minority members questioned the sincerity of negotiations with the majority.

Coalition leaders at the start of the session laid out plans for what was to be a succession of votes, including questions of whether to rescind the earlier failed vote and vote again. Stutes said it was her intent to complete those votes and then work with Tilton on trying to complete the “potential” statement of the House. Rep. Bryce Edgmon, the House Rules chair, later referred to a statement of the House as nonbinding.

Rep. Tom McKay, an Anchorage Republican, said he was prepared to support the effective date provisions. But he said negotiations called for a vote on the statement of the House first. “But if the other side’s not negotiating in good faith and gonna play tricks,” he said he was voting no.

Stutes called for a break after a number of speeches, during which she met with Tilton and legislators huddled amongst themselves. At one point, Senate President Peter Micciche and Senate Minority Leader Tom Begich were outside the House chambers, monitoring developments.

When the House reconvened, after an extended break, members took up the statement of the House, passing it 30-8, and then voted on the effective date provisions of the budget, managing 28 votes, including support from McKay and Tilton.

The House and Senate ended the special session, their second of this year, shortly afterward.

Stutes said there had been some communication issues but believed the outcome was a positive one. Tilton said she wouldn’t describe the outcome as a victory but as a beginning.

Tilton said a measure of trust went into Monday’s votes and noted her 18-member caucus still maintains leverage as talks continue. Though the special session, called to address the budget, ended, there are outstanding issues.

As it stands, the dividend residents would receive this year is $525, the result of budget maneuvers that tied the size of the check to a key vote that failed in each chamber.

Under the state constitution, money taken from the constitutional budget reserve, which lawmakers have relied on to help pay for government, is to be repaid. The budget proposal included language meant to prevent accounts used for such things as student scholarships and rural electric costs from being swept into the reserve fund. But a three-quarter vote, needed to access the reserve account, also was needed to prevent the so-called sweeping of accounts into the reserve fund. Neither chamber was able to achieve that threshold.

The budget proposed a roughly $1,100 dividend but tied part of the funding to the constitutional budget reserve and another reserve fund that is among the pots considered subject to the sweep. Failure of the three-quarter vote left the dividend at $525.

Micciche said considerable work still remains this year and that “very few” in the Legislature are satisfied with the lower dividend amount.

Dividends typically are paid using earnings from the state’s oil-wealth fund. The size of the check has become an annual political hot-button, particularly with lawmakers using earnings from the oil-wealth fund to also help pay for government expenses.

Legislative leaders have indicated they share Dunleavy’s stated interest in finding a long-term solution to the dividend. But what that may look like and what other pieces of a fiscal plan might go with that are yet to be decided.

Another special session is pending for August.