Alaska Gov. Dunleavy introduces new budget bill as legislators talk about how to avoid government shutdown

Alaska House of Representative members attend the first floor session of the second special session this year on June 23, 2021, in the Alaska State Capitol in Juneau. House Speaker Louise Stutes, R-Kodiak, on the far right, talks with Rep. David Eastman, R-Wasilla, about comments he was making on the floor. (Photo by Andrew Kitchenman/KTOO and Alaska Public Media)
Alaska House of Representative members attend the first floor session of the second special session this year on June 23, 2021, in the Alaska State Capitol in Juneau. House Speaker Louise Stutes, R-Kodiak, on the far right, talks with Rep. David Eastman, R-Wasilla, about comments he was making on the floor. (Photo by Andrew Kitchenman/KTOO and Alaska Public Media)

A new version of the state budget from Gov. Mike Dunleavy would set the permanent fund dividend at roughly $2,350. But it would draw more than planned from permanent fund earnings. 

The new budget bill, Senate Bill 2001, was introduced on Wednesday, the first day of the second special session. 

Lawmakers are discussing what it will take to avoid a state government shutdown on July 1. A vote in the House on the original budget bill, House Bill 69, fell four votes short of the number needed to make the budget effective on that date. 

Leaders from both House caucuses said that their talks are focusing on the vote on the effective date for the budget bill the Legislature has already passed.

House Speaker Louise Stutes, a Kodiak Republican, was positive about the negotiation. 

“Nobody wants a shutdown,” she said. “And I’m very optimistic.”

Palmer Republican Rep. Cathy Tilton, the minority caucus leader, agreed that no legislators are “hoping for a shutdown.” She said members of her caucus want a public agreement from majority caucus legislators on the components of a long-term plan for the state’s budget. She said what lawmakers have said so far isn’t enough. 

“We’ve had this 154 days of no discussion about what this structural fix looks like, and we’ve had a plan that’s been put in front of us — albeit a governor’s plan and maybe not a perfect plan — but we have not even had discussion on that,” Tilton said.

Tilton would not provide information on the details of the agreement her caucus is seeking, saying they are part of the negotiation. 

Rep. Sara Rasmussen, an Anchorage Republican, was absent for the first budget vote. She said she would vote to make the budget effective on July 1, which would reduce the number of votes needed to prevent a shutdown to three.  Sixteen members of the 18-member House minority voted against making July 1 the effective date for the budget, while all majority caucus members and Fairbanks Republican Reps. Bart LeBon and Steve Thompson also voted for it. Rasmussen is not a member of either caucus.

Members of the mostly Democratic House majority caucus have said Dunleavy, a Republican, chose to make a shutdown possible. They have said decades of precedent and legal opinions support keeping the state government open. The current Department of Law disagrees that the precedents apply to what’s happening this year. 

Attorney General Treg Taylor filed a lawsuit seeking an opinion from the courts on the issues under dispute. Anchorage Superior Court Judge Herman Walker scheduled oral arguments in the case for next Tuesday, June 29, one day before the deadline to avoid a shutdown.

The House Finance Committee is scheduled to meet on Thursday afternoon to discuss the effective date of the original budget bill.

CORRECTION: This story has been corrected to reflect the correct days for oral arguments in the state lawsuit and the deadline to avoid a shutdown.

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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