Senate passes its version of state budget after charged debate

Senators and onlookers gather in the Senate chambers in the Alaska Capitol shortly before debating state operating budget amendments, April 12, 2018. (Photo by Skip Gray/360 North)

Senators and onlookers gather in the Senate chambers in the Alaska Capitol shortly before debating state operating budget amendments on Thursday. The Senate passed the measure later in the day. (Photo by Skip Gray/360 North)

The Alaska Senate voted to pass its version of the state operating budget Thursday.

The budget is the first in the state’s history that would draw from Alaska Permanent Fund earnings to pay for government services.

The Senate voted 13 to 7 to pass the budget, House Bill 286, after a sometimes charged debate. The vote came after the Senate defeated 24 proposed amendments, including one that would have raised permanent fund dividends to the full amount under a formula set by state law.

Eagle River Republican Sen. Anna MacKinnon said the majority chose not to pursue more budget cuts.

“The people of Alaska expect us to come together,” she said. “The people of Alaska are divided. If we cannot unite around a position at this point in our history, they are confused.”

The Senate bill would spend $4.2 billion on the portion of the budget the Legislature focuses on each year. Four out of 10 of those dollars would come from permanent fund earnings.

The budget includes $1 billion to pay for permanent fund dividends. Dividends would be $1,600, which lines up with the House’s budget bill.

Anchorage Democratic Sen. Berta Gardner said the budget is imbalanced.

“This body, in this budget, is relying on our savings accounts and dividend reductions,” she said. “And that’s not a fiscal plan – it’s a permanent fund-only plan.”

Bethel Democratic Sen. Lyman Hoffman defended the budget.

“It does provide services that Alaskans have grown to depend upon,” he said. “Everyone is not pleased. And my friend and co-chairman when I was in the House of Representatives Ron Larson said, ‘If not everyone is happy, then maybe we’ve done a good job.’”

The Senate version of the budget doesn’t include $1.28 billion for school funding. The Senate would provide that money in separate legislation, House Bill 287.

Anchorage Democratic Sen. Bill Wielechowski proposed the PFD amendment, which would have set dividends at roughly $2,700. That’s the amount they would have been under the formula used until two years ago. Wielechowski said the Legislature is ignoring its laws by lowering the dividend.

“Well, we’re not following those statutes with the way the bill is currently written,” Wielechowski said. 

 The PFD amendment failed in an 8 to 12 vote.

Another budget amendment would have added $10 million to the University of Alaska budget. The amendment would have restored most of the money the Senate Finance Committee cut from the House version of the budget.

Anchorage Republican Sen. Natasha von Imhof spoke against it.

“While cuts and restructuring have been painful for students, for faculty and staff as well as communities, the university system is just one of 17 statewide departments that we the Legislature are responsible for funding,” she said. 

The university funding amendment was defeated, with only the five minority-caucus Democrats voting in favor of it.

A conference committee is expected to resolve differences between the House and Senate budgets.

The legislative session is scheduled to end on Sunday. But lawmakers will likely miss that deadline. While voters passed a law in 2006 setting the session at 90 days, the Alaska Constitution allows sessions to be up to 121 days.

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