Sen. Bert Stedman, R-Sitka, describes the $4.3 billion operating budget in the Senate chamber on Monday. (Photo by Andrew Kitchenman/KTOO and Alaska Public Media)
The Alaska Legislature finished its work on the operating budget on Monday, without setting an amount for permanent fund dividends. The Senate passed House Bill 39 a day after the House of Representatives approved it.
The budget includes $4.3 billion in spending directly controlled by the Legislature and $190 million in reductions. The biggest cuts are $87 million to Medicaid and $40 million to the ferry system. Spending would increase $11 million for public safety and $8.5 million for corrections.
Sitka Republican Sen. Bert Stedman said the budget keeps downward pressure on spending.
“We had to negotiate with the other body,” Stedman said. “We had to give, meet in the middle. And we did that in good faith, both bodies. We came up with something that’s workable.”
It’s not clear how deeply Gov. Mike Dunleavy will cut using the line-item veto. Medicaid, the university and school bond debt reimbursement are the areas with the biggest increases over what the governor proposed. Education funding is caught in a legal dispute between the Legislature and the Dunleavy administration.
Dunleavy could also choose to veto the entire budget over the lack of PFD funding. The budget includes enough money for dividends of roughly $900. Full dividends under state law of roughly $3,000 would require $1.28 billion in further budget reductions and draws from state savings.
Both chambers passed a measure, House Concurrent Resolution 101, starting a new working group. It will make recommendations on how the state should use permanent fund earnings in the future, including the formula for setting PFDs.
Anchorage Republican Sen. Natasha von Imhof said the working group could provide fresh ideas after regular and special sessions that have lasted too long.
“This is Day — I don’t know what the heck day it is, Madam President — it’s Day A Lot,” von Imhof said, addressing Senate President Cathy Giessel, R-Anchorage. It was the 26th day of the special session after 121 days in the regular session.
“And we’re all tired. And it is time to get a new perspective. This fishbowl and air is very stale,” she said.
The Senate passed the working group resolution by an 11-9 vote. The House passed it with a 22-15 vote.
Eagle River Republican Sen. Lora Reinbold voted no. She compared the working group to the Alaska Criminal Justice Commission that provided recommendations for what became Senate Bill 91 three years ago.
“They came up with goofball recommendations,” she said. “Those recommendations helped birth SB 91.”
Stedman said he expects the Legislature to set the dividends in another special session by Sept. 1.
The Senate passed the operating budget unanimously. The House voted 22-15, with all Republicans who aren’t in the majority caucus voting against it.
The only other item left on the agenda for the special session is the capital budget. The session’s last day is Friday.
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