Alaska House passes budget at rapid pace, leaving dividends until later

Rep. Neal Foster, D-Nome, on Tuesday, Jan. 21, in Juneau. Foster is the co-chair of the House Finance Committee and spoke in favor of the state budget on Tuesday. (Photo by Rashah McChesney/KTOO)

The Alaska House of Representatives passed the state budget on Tuesday along caucus lines.

Nome Democratic Rep. Neal Foster said they arrived at the budget through a lot of give-and-take.

“We were able to get this budget out a whole week earlier than at any time over the past decade, on track for a 90-day session,” Foster said.

It’s been longer than that. This is the earliest the House has passed the budget since at least 1993, according to House Finance Committee staff.

The budget, House Bill 205, doesn’t fund permanent fund dividends. House leaders said PFDs will be addressed later in a separate bill.

Members of the Republican House minority voted against the budget, citing the lack of PFD funding. The body rejected more than a dozen minority-caucus amendments aimed at increasing current PFDs or cutting spending. It also rejected paying back past dividend amounts that were cut.

Rep. Mark Neuman, a minority-caucus Republican from Big Lake, said his constituents feel that government spending is a problem. He said Republican Gov. Mike Dunleavy introduced a budget with nearly flat spending to reduce conflict.

“We’ve seen what his preferred budget was last year,” Neuman said. “The Legislature had a fit. The public had a fit about a lot of the issues. He introduced a flat budget to take the wind out of that sail, I believe.”

Kenai majority-caucus Republican Rep. Gary Knopp praised Dunleavy’s approach this year.

“He laid out a great starting point for us, not draconian in style,” he said. “It was pretty flat with last year’s, and it gave us the opportunity to get off the ground running. And so you really have to thank him for that.”

Juneau Democratic Rep. Sara Hannan said the state still has unmet needs. But she supported the budget.

“I urge you to support the operating budget, because it is a compromise of what we need to do to keep Alaska open for business and to keep Alaska prepared for the 21st century,” she said.

Spending on everything other than PFDs would be similar to the budget proposed by Dunleavy. The portion of the budget directly controlled by the Legislature would be $4.45 billion.

The budget includes a $25 million cut to the university budget that the governor and the university regents agreed to in August.

The House budget would spend $9.7 million more than the budget Dunleavy proposed. The largest increase to Dunleavy’s proposal was to the Alaska Marine Highway System.

Kodiak Rep. Louise Stutes, a Republican in the majority caucus, said the increase would start to bring back the ferries.

“That’s step one in bringing back transportation to some of our stranded rural communities; that’s filling their freezers; getting them rides to the doctors,” she said.

The largest cut to Dunleavy’s proposal was against sending prisoners out of state. The administration has dropped that proposal.

Anchorage Republican Rep. Lance Pruitt, the minority leader, said that despite voting no, he appreciated the majority engaging with the minority on the budget.

While several representatives praised programs funding education, Wasilla Republican Rep. David Eastman said the budget isn’t good for children.

“This is not at all a kid-friendly bill. What we might be spending toward educating our children we are taking from them on the backend because … we are spending more than we are taking in,” Eastman said. “And so over time what that is going to mean is fewer opportunities, fewer dividends — if any — (and) higher taxes.”

The House went through all of the amendments on the floor on Tuesday. It adopted one amendment related to the Parents as Teachers program. It rejected all minority-caucus amendments. Eastman introduced most of them.

The final vote was 23-16. Anchorage Republican Rep. Gabrielle LeDoux, who isn’t in a caucus, voted against it. Eagle River Rep. Sharon Jackson, a minority-caucus Republican, was absent.

The budget bill now heads over to the Senate.

Andrew Kitchenman

State Government Reporter, Alaska Public Media & KTOO

State government plays an outsized role in the life of Alaskans. As the state continues to go through the painful process of deciding what its priorities are, I bring Alaskans to the scene of a government in transition.

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