With the operating budget stalled in the House, the Senate works on its own

The exterior of the Alaska State Capitol in Juneau, Alaska.
The exterior of the Alaska State Capitol in Juneau, Alaska.(KTUU)
Updated: May. 6, 2021 at 7:24 PM AKDT
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JUNEAU, Alaska (KTUU) - With less than two weeks until the end of the regular session, the Alaska Legislature still needs to pass an operating budget, a capital budget and a Permanent Fund dividend.

The House of Representatives typically passes an operating budget first which is then debated and changed by the Senate. The differences between the two versions of the budget are then reconciled so a single bill can pass through the Legislature.

But the budget has stalled in the House.

House Speaker Louise Stutes, R-Kodiak, made the unusual decision of taking it off the floor on Sunday and sending it back to committee. Dozens of amendments from the Republican minority caucus were left unheard.

Closed-door negotiations have been taking place between legislative leaders to find a way to get the budget back on the floor so it can pass to the Senate.

“The discussion has been the number of amendments we have and whether we would be willing to cut those back,” said House Minority Leader Cathy Tilton, R-Wasilla.

The House majority coalition, with 15 Democrats, two Republicans and four Independents, has a one-seat majority. Five budget amendments passed over the weekend with support from majority members, raising concerns among some that the final budget bill could contain some unpalatable provisions for progressives.

Tilton said her preference is to hear all the remaining amendments, but she is asking that members of the minority caucus self-monitor so debate doesn’t stretch on indefinitely.

“To ask the members to remove their amendments is kind of a big ask,” she added.

With the operating budget expected on the House floor sometime early next week, the Senate has started work on its own version to move the process along.

Sen. Bert Stedman, R-Sitka, oversees the operating budget in the Senate. He said the intention is still to wait for the House to pass a budget, but time is running out for the Legislature if it wants to adjourn before midnight on May 19.

On Wednesday, the Senate Finance Committee looked at the budget with all the federal funding removed to get a clear understanding of the state’s fiscal situation. The revenue picture has improved since oil prices crashed in 2020.

Alexei Painter, head of the nonpartisan Legislative Finance Division, showed that Alaska would largely have a balanced budget before paying a PFD.

“As oil prices go up and down we could have a surplus or a deficit, it’s hard to know at this point,” he said.

The Senate’s budget does not contain a dividend yet. It does contain a $2 billion transfer to the constitutionally protected portion of the fund, a figure that could change during debate.

The addition of some of the $1 billion in federal funding from the American Rescue Plan Act is adding to the uncertainty. Stedman says there could be an advantage in the Legislature waiting to decide how to spend a significant portion of that package during a special session.

The same special session, or potentially another one, could also deal with the PFD and its long-term future.

The capital budget, which is typically passed by the Senate and sent to the House, is stuck, too. That budget is used for infrastructure spending and capital projects, but this year it is delayed with the possible addition of federal funding and the unknown impacts of an anticipated federal infrastructure bill.

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