House fails to act on budget Tuesday

House Majority Leader Chris Tuck, D-Anchorage. He proposed the amendment that restored a full...
House Majority Leader Chris Tuck, D-Anchorage. He proposed the amendment that restored a full Permanent Fund dividend. (KTUU)
Published: Mar. 27, 2018 at 7:32 PM AKDT
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Like a hangover that wouldn’t go away, the Alaska House couldn’t find a way to resolve the 2019 budget on Tuesday, a day after it unexpectedly approved a full Permanent Fund dividend for next fall.

The House met twice Tuesday, and both times gaveled out without discussing the budget - House Bill 286 - which remains the biggest and most important item on its agenda. All it managed in its morning session was a prayer, the Pledge of Allegiance to the U.S. flag and introduction of guests. The evening session was even less productive.

Senate leaders, who assumed the House would finish the budget last week, were forced to cancel public hearings Tuesday and Wednesday in the Senate Finance Committee.

Outside the restored 1931 Capitol, a snowstorm turned to rain. Inside, the 71st day of the session came and went.

A day after some people cheered the budget amendment by Democratic House majority leader Chris Tuck, which restored the full dividend and is estimated at $2,700, majority leaders huddled to try to find a way forward. Some were proposing the amendment be rescinded, while others hoped the Senate would strip out the money or Gov. Bill Walker would veto at least part of it.

Walker proposed a budget in December that contained a possible dividend of $1,216, up from the previous dividend of $1,100, but less than half the full dividend as calculated by the traditional formula.

He vetoed about half the 2016 dividend and the Legislature reduced the 2017 dividend, again by about half. However, the 2018 election would make it difficult for officials to cut the free money now being applied for by Alaskans.

According to budget estimates, the amendment added nearly $1 billion to the $2.3 billion deficit.

The Permanent Fund earnings reserve — the same pot of money that pays dividends — has been eyed to pay for state government. The red-hot markets have helped Permanent Fund investments do surprisingly well in 2017, and some legislators said they thought the earnings could pay both the high dividends and fill most, or all, of the deficit. Others said taking so much from the earnings account would be "reckless."