Alaska House wraps up budget amendment debates ahead of final vote

JUNEAU, Alaska (KTUU) - The Alaska House of Representatives wrapped up three long days of debates on operating budget amendments on Thursday evening. A final vote on the House version of the state budget is scheduled for Saturday.

Eighty-eight amendments were prepared to be introduced, but many were tabled or not introduced. Six amendments to the budget were adopted.

The House budget contains a Permanent Fund dividend at roughly $1,250 per eligible Alaskan and a separate one-time energy relief check of $1,300. The dividend figure effectively follows a 75-25 split from a now-annual draw from the Permanent Fund to pay for state services and the dividend.

Proposals to pay a $4,200 dividend following the 1982 statutory formula were narrowly rejected by the House. Advocates of a full PFD argued high inflation and high fuel prices justify the larger dividend while critics say it is unsustainable.

Gov. Mike Dunleavy has proposed paying a 50-50 dividend this year at just over $2,500 plus another $1,200 to pay the remainder of the 50-50 dividend from last year. He has said the state can afford that while putting billions into savings with a windfall of revenue from high oil prices.

If supported by the Senate, and the governor, the House’s budget would set aside $1.2 billion to pay for K-12 education one year ahead of time. Supporters of forward funding say it provides certainty for teachers and avoids pink slips going out.

The bill contains a $57 million increase to the school funding formula. If it survives in the Senate, there would be a rise of $223 to the base student allocation after five years of flat funding. There is $359 million to recapitalize the fund used to pay scholarships for Alaska college students.

The House is set to approve paying $472 million as the remainder of oil and gas tax credits owed to producers from a now-defunct program that aimed to increase production.

Just over $1 billion would be transferred to the constitutionally protected part of the Permanent Fund as inflation proofing. Critics suggested that means less revenue would be available in the future to pay out dividends.

The budget also aims to rebuild state savings accounts to around $2.2 billion after being depleted by a decade of deficit spending.

The six amendments to the budget that were adopted during debates include stripping out Medicaid funding for abortions despite Alaska Supreme Court rulings that doing that is unconstitutional.

On a narrow 20-17 vote, the House approved removing $495,000 from the budget that was set to be paid as a settlement between Gov. Mike Dunleavy and two sacked state psychiatrists. The state footing that bill has been controversial, as Dunleavy was found personally liable for the so-called “loyalty pledge” lawsuit.

Grace Lee, a spokesperson for the Department of Law, said by email that the two psychiatrists won’t receive the settlement if it is not restored to the budget that is eventually passed by the Legislature.

“The other consequence of failing to make this payment is it will have repercussions on the willingness of other parties to sit down with the Department of Law to settle with the State. This increases expenses and would result in more cases going to trial,” she added.

Other adopted amendments include extra funding for ice roads in the Arctic and a tripling of the amount paid to Alaskans serving on juries. Juror pay is set at $25 a day and hasn’t been increased for over 40 years.

Lawmakers approved paying hiring bonuses for public defenders and prosecutors as a way to boost recruitment over objections that could be unconstitutional.

The House is set to reconvene on Saturday at 10 a.m. for a final vote on the budget. The Senate is set to pass its own version soon. Any differences between the two bills would need to be reconciled so a single bill can pass through the Legislature and onto the governor’s desk for his consideration.

Copyright 2022 KTUU. All rights reserved.