The leaders of the Alaska Legislature would like to see the state budget pass on time this session. And some of them want to see the Legislature pass a long-term plan for the state’s finances and permanent fund dividends. But they acknowledge there are significant obstacles in both the short and long term.
Higher oil prices, growth in the permanent fund and federal funding are some of the reasons the state has more money this year.
Senate President Peter Micciche, a Soldotna Republican, said it’s a quandary – it could make the annual budget easier, but it also removes some of the pressure to pass a long-term plan. He said a long-term compromise will take lawmakers crossing the divides in both chambers to talk with each other.
“There’s tension in all four caucuses,” he said. “We have very different kinds of people that may have the same letter next to their name. And they just need to put their pride aside, get in the same room together and talk those issues out.”
He said the fact that this year is an election year isn’t an excuse to fail to take action.
“I hope Alaskans are judging legislators this year on whether or not something does happen” in passing a long-term plan, he said. “Really good economic situations, fiscal situations in Alaska are temporary. And a fiscal plan will make that permanent.”
Sen. Tom Begich, a Democrat from Anchorage, is the Senate minority caucus leader.
Along with work on a fiscal plan, he’s focused on a bill aimed at improving students’ reading skills, which would also expand access to pre-kindergarten education. And he says it’s important that the Legislature pass a plan on how to spend billions of dollars of federal infrastructure and other funding. He also acknowledged that the higher revenue could be a mixed blessing.
“It makes it very difficult to get a fiscal plan, when people can get an easy ride in an election year,” he said. “And my job is to hold people accountable to needing to put together a fiscal plan, especially because it’s easier to do it now. It’s much easier to do it now while we can afford to do it than it will be down the road, when it’s just going to become a bitter argument that pits people against each other.”
He said bills put forward by him and the Senate Finance Committee that would rewrite the permanent fund dividend formula among other things are a starting point. He also said a decrease in the student population could allow for the state to expand pre-K without increasing overall school spending.
In the House of Representatives, Speaker Louise Stutes, a Kodiak Republican, said the majority caucus is more cohesive than it was a year ago, when it took weeks into the session to form a majority. The majority is mostly Democratic, but it includes two Republicans and four independents.
“I would say that our priority is getting out of here in a timely fashion,” she said. “And in order to get out of here, we have to have a budget that has passed.”
Like Begich, she said it’s important for the Legislature to appropriate the money that the state is receiving from the federal relief and infrastructure bills. She objected to provisions of Gov. Mike Dunleavy’s budget plan that use federal dollars in place of state spending. She said the federal money should add to the state services.
For example, she’s concerned that Dunleavy’s administration relies on federal money to operate the Alaska Marine Highway System.
“So what happens at the end of five years, when the federal dollars run out?” she said.
Stutes also said that the House committee chairs will determine the agenda for bills other than the budget. She added that legislators will be aware of the need to finish their work with an election year ahead of them.
House minority leader Rep. Cathy Tilton, a Republican from Wasilla, said a long-term plan is needed to bring business investment to the state. Her caucus’s other priorities include passing bills related to elections and opposed to vaccine mandates. They also support a bill that would require that patients be allowed to have someone with them to provide support in the hospital.
Tilton said she hopes the Legislature can finish the budget without a state government shutdown, like what nearly happened last year.
That would require more members of her caucus supporting allowing the budget to go into effect on July 1. The votes of at least six minority-caucus House Republicans are needed for bills to go into effect less than 90 days after they’re signed into law, according to Dunleavy’s administration.
And she said that may not happen this time.
“Last year, we were able to come together on the fiscal policy working group,” Tilton said. “But the outcomes of that were not what we expected. So therefore, I’m not so sure that we would be able to come together.”
Last June, minority-caucus Republicans relented when the other caucuses agreed to form a group that would recommend a plan.
While that happened, the plan didn’t advance during special sessions. Committees have been meeting to discuss both this year’s budget and Alaska’s long-term outlook.