Alaska House passes an unfinished operating budget, but PFD still undecided

JUNEAU, Alaska (KTUU) - With nine days until the regular session ends, the Alaska House of Representatives has passed its version of the operating budget on a 23-16 vote.

It is effectively a first draft, and will be debated in the Senate, where legislators will use clearer guidance on how to spend $1 billion in federal COVID-19 relief.

The largely flat budget was passed with support from all 20 members present from the House majority coalition and Republican Reps. Sara Rasmussen, Bart LeBon and Steve Thompson. It does not include a Permanent Fund dividend, which the House looks set to debate through other legislation.

Rep. Neal Foster, D-Nome, said the budget would spend just over $4.2 billion in state funds. That does not include over $200 million put into the operating budget from the federal American Rescue Plan Act, a figure likely to change in the Senate.

The Alaska Marine Highway System would be funded for 18 months, domestic violence shelters would be fully funded after bracing for a shortfall. The University of Alaska would be funded at levels agreed to in a compact between the governor and the Board of Regents.

The U.S. Treasury Department guidance on how the federal COVID-19 funds can be spent was released on Monday morning. The state of Alaska looks set to receive the federal allotment over two years based on the state’s unemployment rate with roughly $500 million available now and $500 million available next year.

Foster said the House version of the budget spends around 70% of the federal package this year, but he is comfortable passing it now, knowing that figure would be reduced by the Senate. Some members of the Republican minority opposed passing an “unbalanced” budget.

The Senate majority caucus has advocated spending around half of the federal package this year and half next year.

Sen. Bert Stedman, R-Sitka, oversees the operating budget in the Senate. He has also suggested that the Legislature could hold a summer special session to decide how to spend significant portions of the $1 billion in federal funding to ensure it’s spent wisely.

On Monday, the House considered dozens of unheard amendments after eight days of deadlock. Most of them were from the Republican minority caucus, but they only proposed small spending reductions.

Some of those amendments were adopted, including one that would make small cuts to the Office of Children’s Services.

Some of the Republican minority’s other amendments dealt with more conservative social priorities. Those largely failed to be adopted by one-vote margins, including one that would have prohibited restrictions on carrying firearms on University of Alaska campuses.

One amendment that was adopted by the House would prohibit the state from funding some abortions. The Legislature has passed similar prohibitions multiple times in the past but the Alaska Supreme Court has consistently ruled them as unconstitutional, most recently in 2019.