Summary: After hours of impassioned speech, the capital budget itself passed, but funding for it and the “reverse sweep” did not. There will be a revote tomorrow.
The House is adjourned until 10 a.m. tomorrow.
There were 27 votes in favor of the bill, so the bill passed. There were 25 votes for the CBR draw and reverse sweep provision, so that aspect failed.
Tilton said she agrees with Pruitt that today is “disappointing.”
She disagrees that the capital budget is bare bones or essential. Tilton took exception to the same line identified by Wilson and Pruitt.
“We’ve heard it’s standard language Mr. Speaker, but these are not standard times, Tilton said.
She is not supportive of the bill.
Johnston said the CBR is the state’s cash management fund, and the Legislature needs to be able to manage its funds.
She said the language is so vague since there is no certain date or dividend bill.
“Of course, I had some prepared remarks, but I’m going to throw those all away,” Johnston said.
She said if the governor’s more than $400 million in vetoes stand, then the sweep will function as an additional $115 million in cuts, too.
“In summation, this is a very silly thing not to vote for,” Johnston said. “This budget represents an opportunity for us to fund critical life, health and safety projects.”
Kreiss-Tomkins said this is the first time in his seven years in the Legislature, he’s never heard of the sweep being used as a point of negotiations.
“It just breaks stuff,” Kreiss-Tomkins said. “It just makes stuff stop working.”
House Minority Leader Lance Pruitt, R-Anchorage, said he was “frustrated” upon arriving to Juneau since conversation about funding with the CBR rose up again.
Pruitt is also taking exception with the line allowing future appropriation bills drawing funds from the CBR.
“I struggle with signing off today without knowing what can be spent,” Pruitt said. “This is more than the backstop language. This is saying that there is a bill that could come forward, you don’t know what it is, but we’re going to fund it.”
Pruitt said he does not want to vote today because he thinks there is a way out of the current impasse, but he cannot support the current bill.
He also said he was displeased by a Tweet by a member of the House that implied the governor would need to give the House Minority permission to vote for the bill.
Pruitt asked for more unity going forward and said he does not need permission to vote.
“Lay your swords down, so that we can figure out what can bring us together because Alaska is asking us to do that,” Pruitt said.
Louise Stutes, R-Kodiak, said she will support the bill.
Rep. Bart LeBon, R-Fairbanks, is also meting out praise for the bill.
LeBon said maybe learning about the dozens of accounts impacted by the sweep and reverse sweep.
He thanked the the Senate for its 19-0 vote in favor of the bill.
“I believe sincerely we have an obligation to do likewise,” LeBon said.
Rep. Andi Story, D-Juneau, said when she was running for office voting on a capital budget was something she was really looking forward to since it means jobs for Alaskans.
Story said she is in favor of the bill.
Rep.Matt Claman, D-Anchorage, spoke in favor of the bill.
He acknowledged the bill’s imperfections, but said he supports it anyway.
“Are we going to let perfect be the enemy of the good?” Claman said.
Fields echoed the sentiment that now is not the time to play politics, and it is important to protect 15,000 Alaska construction jobs.
Rep. Chuck Kopp, R-Anchorage, is voicing “strong” support for the bill.
He said the bill is important since it provides funding for the crime bill, House Bill 49, passed a little over a month ago.
“If we’re serious about that, then there’s only one button to push,” Kopp said.
Rep. Gary Knopp, R-Kenai, said his comments would be brief and is speaking in favor of the bill.
Knopp said in his opinion the bill is the result of compromise among different parties and bodies.
“This bill has been nothing but compromise,” Knopp said. “You can’t say because you didn’t get one of your issues into the bill where it truly doesn’t fit that there isn’t compromise.”
He said there’s “no good reason” to delay this bill.
Vance will not be supporting the bill. She said if today’s bill does not pass, she will be present to work on a better bill tomorrow.
“What we haven’t talked about is why the sweep would be a good thing for Alaska,” Vance said.
She said Alaskans should know where every dollar is spent.
“This bill as it stands, I cannot support,” Vance said.
Foster is discussing his support for the bill — specifically protecting Power Cost Equalization fund from the sweep.
Josephson is speaking in favor of the bill and to the relatively common language included in the bill.
Some House Minority members seem to be huddling outside the chambers. With 33 representatives present and 30 votes needed for a super majority vote, all of those members matter.
Vance said she doesn’t support drawing from the CBR for the bill.
“But what this bill does is try to reverse the actions that were taken on the previous capital bill,” Vance said.
She took exception with the bill being introduced when some lawmakers were meeting in Wasilla rather than Juneau, too.
Hannan is throwing her support behind the bill, especially since it reverses the sweep.
Ivy Spohnholz, D-Anchorage, said she is also supporting the bill, but she noted she occasionally wishes she had been part of the Legislature when oil prices were higher.
“We’re not in those times right now, so we’ve had to tighten our belt quite a bit,” Spohnholz said.
Spohnholz said using the earnings reserve instead of the CBR doesn’t make fiscal sense since the CBR earns about 1 percent of interest per year compared to 10 percent or the earnings reserve.
She also mentioned the federal matching dollars that will come Alaska’s way if the bill passes.
Rep. Adam Wool, D-Fairbanks, is also supporting the bill.
“I hear about compromise, and this bill is for some not acceptable, and we had some amendments, but most of the amendments dealt with the PFD not with the capital budget,” Wool said.
He said many people who work in construction need this bill to be passed in a timely fashion.
Wool noted that every year there has been a sweep there has been a reverse sweep and called a reverse sweep “pretty standard.”
The House is back to order.
Rep. Geran Tarr, D-Anchorage, rose to support the bill.
Tarr said the language that Wilson objects to is fairly typical, and she thanked Merrick for her comments that cast politics aside.
“We need to pass the capital budget,” Tarr said.
Folks are beginning to make their way back to the Chambers. A critical vote will be coming soon.
LeDoux said the bill is not perfect, but it’s something she will feel compelled to support.
Wilson said there are many portions of the bill she could vote for, but she will vote against for the bill specifically because language in the bill insures appropriation bills fund from the CBR.
“Do we pay our bills out of it or do we utilize it,” Wilson said.
She is framing the matter as the Legislature giving up its appropriation power.
“At the end of the day, I wish I could vote for it,” Wilson said.
A brief at ease has been called for, and folks are scrambling. We’ll see how this shakes out.
Johnston said the governor sent the Legislature a budget with a $100 million hole and SB 2002 helps fill the hole.
“We really felt we needed this ‘head room’ to protect ourselves and to protect our state,” Johnston said.
Rep. Kelly Merrick, R-Eagle River, said she has concerns about the bill, but she is also worried about losing out on federal dollars.
“This bill means good jobs for Alaskans, and I’m not willing to play politics when there is so much on the line,” Merrick said.
Eastman said the bill before the House is no compromise and he will be voting against the bill.
It’s going to take 30 votes for all elements of the bill to pass, and 33 are present. Some defection from the minority is needed. We’ll see what happens.
That was the last amendment.
It’s vote time to see what happens with the bill the Senate Passed unanimously yesterday.
Johnston is delivering the closing remarks.
“This represents an opportunity for us to fund a budget that we sent to the third floor almost a month ago,” she said in reference to the governor’s office.
LeDoux said she’s never received so many compliments from people she knew would vote against her.
“It made not be a perfect solution, but at least it’s an attempt to put out a solution,” she said.
LeDoux then withdrew her amendment instead of “going through the charade” of a vote.
Response to LeDoux’s amendment has largely praised its intent while dinging it for practicality.
Some, such as Fields, said they would like to support it, but there is not enough revenue to make it happen.
“Although this amendment has issues, I agree, but I commend her for doing the work,” Wilson said.
Johnston said she appreciates the effort, but the $3,000 PFD would be paid for using a transfer from the earnings reserve.
“I think we’ve reached the point where we need to figure out how to have a balanced budget, and that requires cuts, that requires smaller dividends, it requires we all take a little chink in the armor,” Johnston said.
LeDoux’s new amendment is a “full PFD” contingent on all items vetoed in the budget being restored and a reverse sweep.
“This is my small attempt to see if we can talk about this and maybe get some place,” LeDoux said.
Fields said endowments should be protected with a three-fourths vote today to ensure Power Cost Equalization and Higher Education funds remain untouched.
Wilson during her wrap-up remarks said she’s surprised the topic of the sweep came up in relation to her amendment.
She said if the discussion was focused on an operating budget rather than a capital budget, she would be happy to allow Josephson to vote on 182 amendments.
Wilson said she will not support a reverse sweep because there are many funds that would be protected by a reverse sweep, and she is not sure of their necessity.
She also spoke in favor of her amendment.
“It is a Band-Aid, it absolutely is, but if I am bleeding, I’d rather have a Band-Aid than bleed to death,” Wilson said.
It failed 23-10.
Next up is Amendment No.4 introduced by LeDoux.
Cathy Tilton, R-Wasilla, is speaking in support of Amendment No. 3.
“This is taking care of a challenge we have right now and filling that need,” Tilton said.
Hannan has joined the fray.
She said she is disappointed possible widespread sweeps were devised without the Legislature’s input.
“It breaks my heart that we didn’t have any policy discussions about them,” Hannan said.
She said it is a “generous offer to Band-Aid” the problem, but it would mean that every year scholarship dollars would be in competition with other projects for the same revenue.
Hannan also called the sweep of the Higher Education fund a “double attack” on the University of Alaska.
Rep. Neal Foster, D-Nome, said the money is not intended to be used for a parking garage, but instead is meant to be re-appropriated.
He also said the amendment is just a “temporary” fix.
Josephson said the amendment is “well-intended but à la carte” and showed favoritism for just one thing that will be hurt by a sweep.
He said he would be much more supportive if their were dozens of other amendments.
“Be careful what you wish for,” Edgmon said.
LeDoux said a temporary fix is better than no fix.
The House is at ease seems like it will be a longer one. A lot of folks are taking the chance to stretch their legs or snag a cup of coffee.
Wilson introduced an amendment that would take money set aside primarily for a parking garage and instead use them to fund the WWAMI program. WWAMI is the University of Washington School of Medicine’s multi-state medical education program; the acronym, stands for the states it serves: Washington, Wyoming, Alaska, Montana and Idaho.
Wilson said she’s heard a lot of concern from constituents that WWAMI will be hurt by “the sweep.”
Johnston said in light of the intent of the amendment it sounds like Wilson will be supporting “the reverse sweep.”
Wilson’s facial expression and head shake indicated that likely is not the case.
LeDoux said a reduced PFD is an attack on the most vulnerable.
Additionally, she said tax credits given to oil companies could be a needed source of revenue.
“Again, it’s not really the amount of the dividend to me, what it’s all about is the procedure and the process, and what I’d like to see is the law being followed, and if we don’t like that, we can change the law,” LeDoux said.
She said she would like to see the law changed if there is a vote of the people.
A 22-11 vote means the $3,000 PFD amendment failed.
Kreiss-Tomkins said he has not seen a single proposal that balances the budget and pays out a $3,000 PFD. He said the governor and his budget director have failed to do so.
Those comments drew “point of orders” from both Rep. DeLena Johnson, R-Palmer, and Rep. Sharon Jackson, R-Eagle River.
Jackson said she would like discussion to avoid personal attacks and Johnson said she would like conversation to focus solely on the amendment.
Speaker of the House Bryce Edgmon, I-Dillingham, said he heard factual statement rather than anything that would call someone’s character into question and that he was attempting to offer a lot of latitude to every possible speaker.
The Senate session scheduled for this afternoon is a technical session, which means nothing will be passed.
This floor session and any subsequent committee meeting are going to be where the action is at today.
Both Wilson and Johnston have voiced support for changing the PFD statute to avoid this conflict in the future.
“We as an institution have a lot of clean up to do as far as our statutes,” said Rep. Jonathan Kreiss-Tomkins, D-Sitka.
He said in his estimation there isn’t a vote that could be cast that followed every statute.
A new amendment introduced by Rep. Gabrielle LeDoux, R-Anchorage, would transfer nearly $2 billion from the earnings reserve to the dividend fund to pay for PFDs.
Wilson, whose name is also on the amendment, said it’s not about the $3,000 number, it’s about following the law.
Rep. Andy Josephson, D-Anchorage, said there are many laws, such as the statute establishing the Ocean Ranger program, that have been disregarded.
Rep. Sarah Vance, R-Homer, said she’d be willing to “swallow” a lot of other things in SB 2002 in exchange for the “full” dividend.
Rep. Zack Fields, D-Anchorage, spoke against the amendment and said the Permanent Fund was protected to be a renewable resource by the constitution, and he hopes the the conversation can return to the capital budget.
We're working to pass the capital budget funding this afternoon, question is whether Gov will stop sabotaging it and release minority members to vote "yes." 15,000 construction jobs will be affected, and countless small business contractors. #akleg— Zack Fields (@FieldsZack) July 21, 2019
That doesn’t seem likely to happen.
Rep. Adam Wool, D-Fairbanks, is now talking about PFDs.
“There’s no way I could support this,” Wool said.
He called the amendment the “very first raid” on the Permanent Fund.
“By all means vote against this amendment, and we can all stay here a week longer than we need to,” Eastman said before the vote on his amendment.
His amendment failed 23-10.
Wilson said her amendment would take $86.4 million out of the earnings reserve and place it in the general fund, which would balance the budget.
Johnston said it’s a slippery slope to balance the budget by using the earnings reserve.
Eastman said the amendment has his support especially in light of the senate bill’s similarity to an effort that failed to get super majority support earlier this year.
“Going down this road again and failing again serves no one, particularly our constituents,” Eastman said.
Johnston said she knows more “interesting” amendments are coming.
The amendment introduced by Wilson failed 21-12.
An amendment to that amendment is now making the rounds. It was introduced by Rep. Tammie Wilson, R-North Pole.
The amendment by Rep. David Eastman, R-Wasilla, would revert the bill passed by the Senate to the version initially proposed by the governor.
Rep. Jennifer Johnston, R-Anchorage, said that version of the capital budget was not fully funded.
“I think you might consider that this would be a poor place to start,” Johnston said.
SB 2002 is now up.
The appropriation bill funds the capital budget using the Constitutional Budget Reserve and includes language that would stop a number of state accounts from being zeroed out and transferred to the CBR. That transfer is known as “the sweet.” Stopping it is typically called a “reverse sweep.”
The sweep is getting more attention this year because the governor and Office of Management and Budget have signaled intents to sweep more funds, including the Power Cost Equalization and Higher Education funds, than are typically swept.
Previously Legislative Finance Director David Teal said that could lead to appropriations without actual funding sources.
The House is at ease while an amendment to SB 2002 is distributed to representatives.
Rep. Sara Hannan, D-Juneau, introduced a 6-year-old Juneau boy as a guest.
“I’m sure on a sunny day in Juneau when it’s not raining there are other things he’d rather be doing,” Hannan said, but she said the boy is pleased to be present to do summer learning.
The House has been called to order. There are 33 representatives present and seven excused.
Things are moving on time for the House floor session. The bells rang, and there’s a gaggle of legislators making movement toward the House Chambers.
Yesterday’s Senate vote was unanimous, which seems like an unlikely outcome for today.
The House floor session is still scheduled to start at 1 p.m. This morning’s finance committee meeting never materialized.
It will be interesting to see what the extra time for conversation produces.
House Minority members voted against getting Senate Bill 2002 out of committee yesterday and will be critical to what happens this afternoon.
Something to keep in mind: If the bill the Senate passed Saturday is passed by the House today, it could still be vetoed, which would put the ball back in the Legislature’s court.
It’s looking more likely that the 1 p.m. House floor session will open the day’s action. Tough to see a substantial House Finance Committee meeting taking place within the next 90 minutes.
That could also mean a delay on this afternoon’s Senate floor session, which is slated for 2 p.m. It could also set up a busy start to the normal work week.
There’s a decent chance this morning’s meeting will be postponed past this afternoon’s House floor session, but there has not been official word. It’s a wait and see kind of Sunday.
Things are moving slow this morning in light of this morning’s delayed meeting.
The finance committee meeting has been postponed.
There’s no specific time for when things will pick back up but indications are it won’t be a brief delay.
The House Finance Committee will meet in about 30 minutes to get the day started. While the Senate passed a capital budget and reverse sweep bill yesterday, the Permanent Fund dividend is still on the Legislature to-do list.
The House is scheduled to consider Senate Bill 2002 at 1 p.m. That bill includes reverse sweep language and made changes to Gov. Mike Dunleavy’s capital budget.
It passed 19-0 in the Senate, and needs super majority support to make its way to the governor.
The Senate is scheduled for a floor session at 2 p.m. What happens in the day’s earlier meeting and session will shape what happens there since there is no legislation currently on the Senate’s calendar.
• Contact reporter Ben Hohenstatt at (907)523-2243 or email@example.com. Follow him on Twitter at @BenHohenstatt.