Alaska Senate working to close budget gap with House on PFD, education funding

The State House has passed a budget featuring a $2,700 PFD, but the Senate version of the budget has not yet been decided on.
Published: Apr. 18, 2023 at 3:25 PM AKDT
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JUNEAU, Alaska (KTUU) - With less than 30 days until the end of the legislative session, Alaska lawmakers say they are working to balance the state budget — but gaps still exist between the House and Senate.

With education funding and the Permanent Fund Dividend still a work in progress, the two sides are closing the gap, but conceded in a press availability Tuesday in Juneau that there is still some distance to close.

Sen. Bert Stedman, co-chair of the Senate Finance Committee, said lawmakers will hear public testimony on Thursday and Friday on the operating budget, but added that the capital budget is “pretty skinny.”

The capital budget had been projected to distribute around $2.79 billion in funding to the state.

Both the House and Senate are still debating how to fund education, with a one-time $175 million payout coming out of the Constitution’s Budget Reserve on the table.

Earlier this month, members of the House minority walked off the floor and had to be asked to return to continue proceedings after a disagreement on the structure of Alaska’s education funding.

“We are certainly involved, and encouraging more money to go into education,” Sen. Donny Olson (D-Golovin) said. “I’ve got small children that are 5 years old, and they’re just starting kindergarten, so we’re making sure they’ve got the ability to go ahead and get a good education, but we’ve got to also do it within the parameters that we have as a state to go ahead and afford it.

“That’s where the diceyness is, that’s where walking that fine line is in order to do that.”

In order to adequately fund education, Senators said there must be sacrifices made to the PFD. Senate President Gary Stevens (R-Kodiak) called it an “ongoing process.”

“Many of us are certainly very supportive of education in my caucus,” Stevens said. “Others have a few more questions about how that money will be used.”

The issue of the PFD payout has seen those in the House and Senate discuss anywhere between $1,400 and $3,000 for the yearly check in 2023.

“Those are all discussions that we are having, and we will solve this by the end of the day,” Stevens said.

Olson said since rural Alaskans are more dependent on the oil checks to pay for steeper food and energy prices in villages, the issue of the PFD is one that needs a balance.

″We’re very cognizant of the idea that we have to live within our means,” he said. “We can’t overextend ourselves, and sure, we can’t run the money out that the state has within the next year or two so we’re caught short next year and aren’t able to go ahead and provide the services that are constitutionally required.”

The state House passed a budget featuring a $2,700 PFD payment for qualifying Alaskans on Monday, based in part on the so-called “50-50″ plan, which splits a transfer from the permanent fund; one half for dividends and the other half for services.

Stevens echoed Olson’s sentiments.

“They are interrelated in our budget, and if we have a very high PFD, there’s little money left for education,” Stevens said. “If we have very high education funding, there’s little money left for the PFD. It’s something we have to balance out, and I think through very carefully, and we will.”

The legislature is scheduled to end by midnight on May 17, unless a vote is carried out to extend it into a special session.