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    Alaska House and Senate leaders say they don’t have a final budget solution yet

    Saturday, May 6, 2023 at 7:37 PM

    By James Brooks/Alaska Beacon

    Photo by Jasz Garrett

    Juneau, Alaska (Alaska Beacon) - The regular legislative session is scheduled to end May 17, and without an agreement, overtime is possible.

    With a week and a half remaining in Alaska’s regular legislative session, leading lawmakers say they still haven’t reached agreement on a deal to finish the state budget and end the session on time.

    “We are meeting daily with the Senate … just working on finding some way to come together to put this kind of ‘endgame’ package together, which I can tell you right now, we don’t have the details as of yet,” said Speaker of the House Cathy Tilton, R-Wasilla, on Friday.

    Since 2015, odd-numbered years have brought tortuously long arguments over the budget as lawmakers debate the proper amount of the Permanent Fund dividend.

    Without a state election season to encourage quick action, regular legislative sessions have been followed by special 30-day sessions, and lawmakers have frequently approached the July 1 deadline for the start of the fiscal year.

    This year, the debate is again over the Permanent Fund dividend. The Alaska House has approved a draft budget that contains a dividend of about $2,700 per recipient and a special one-time $175 million boost to public school funding.

    Paying for both of those items creates a substantial projected deficit, which would have to be covered by spending from the state’s principal savings account, the Constitutional Budget Reserve. That would be avoided if oil prices unexpectedly spike, as they did following the Russian invasion of Ukraine.

    Spending from the reserve requires a supermajority of the House and Senate, and the House vote failed because of opposition from the predominantly Democratic House minority.

    That’s left the House proposal partially unfunded, and the Senate has advanced an alternative.

    That alternative includes a dividend of about $1,300 and no spending from the budget reserve.

    During a Tuesday news conference, leading senators said they’re unlikely to approve spending from the reserve, which stands at $2.6 billion. The state drew more than $1 billion from the reserve to cover deficits in the budgets that ended in both 2020 and 2021.

    “This is all a process, a negotiation process, a compromise that has to take place. I think we’ve made it clear where we are. I believe there’s a real disinterest among most senators to go into our savings account when (savings) are as low as they are,” said Senate President Gary Stevens, R-Kodiak.

    On Friday, Stevens said nothing had changed since Tuesday, and he declined a further interview via a spokesperson.

    House Minority Leader Calvin Schrage, I-Anchorage, said he “kind of” likes the Senate budget,  “so I say we vote for that thing.”

    Although he supports the Senate budget plan, he doesn’t see the votes in the House to pass it, he said Thursday.

    That leaves a big question, he said: “What is the other option, and where do you go from here?”

    Procedurally, the Senate hasn’t formally approved its plan with a vote of all 20 senators, but during informal hallway conversations, the idea appears to have enough votes to pass.

    A draft schedule circulated among House and Senate leaders last month called for the Senate to approve its version of the budget this week, but that didn’t happen.

    For the time being, said Sen. Bert Stedman, R-Sitka, the two bills that make up the budget are being kept in the Senate Finance Committee for “flexibility.”

    Preliminary schedules show the capital budget bill — which covers construction and renovation projects statewide — being advanced through the Senate and to the House next week.

    Rep. Craig Johnson, R-Anchorage, said he doesn’t see the situation as one where either the House or Senate must capitulate to the other. As chair of the House Rules Committee, he helps determine when bills are brought up for votes on the House floor.

    “I think if you look at Day 1 of the session, as compared to today, those lines have kind of been moved over here a little bit. So, you know, there’s been progress on both sides,” he said.

    He and Tilton declined to say whether talks have focused on a dividend somewhere between the House and Senate figures.

    “We still have lots of time. There’s still lots of ways we can get to the end,” Tilton said.

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