Summary: The Senate passed a capital budget and “reverse sweep” bill today, and the House Finance Committee voted to move it out of committee. Since the bill involves spending out of the Constitutional Budget Reserve, a super majority vote will be needed. Both the Senate and House are set to adjourn tomorrow afternoon.
Rep. Dan Ortiz, I-Ketchikan, motioned to move the bill out of committee.
By a 7-3 vote, the bill was moved out of committee.
Merrick, Sullivan-Leonard and Tilton voted against it.
The House Finance Committee will next meet tomorrow at 10 a.m.
Rep. Adam Wool, D-Fairbanks, asked about the history of the sweep and reverse sweep.
Teal said it’s been a thing since the early ’90s, and it only occurs when money is owed to the CBR. He said there was no sweep for several years in the mid ’10s.
“In every year there has been a sweep, there has been a reverse sweep,” Teal said.
Sullivan-Leonard asked why there would be a preference for spending directly from the CBR rather than using the general fund.
Teal said spending at a debt from the general fund is effectively the same as spending from the CBR.
Sullivan-Leonard asked for the present balance of both the general fund and CBR.
Teal said it’s currently zero.
“We have not had an end-of-year general fund balance for years,” Teal said.
The end balance of the CBR is slightly over $2 billion in cash and over $14 billion including money the state owes itself.
Merrick asked if it might be possible to fund some of the more urgent things impacted by the sweep with unrestricted general funds and address the reverse sweep with legislation at a later date.
Johnston said the longer things the more complicated accounting becomes.
However, Merrick said complicated accounting might be preferable to leaving some programs without funds.
Teal said one of the risks of sweeping multiple funds is losing the ability to accrue interest that helps pay for programs.
“It’s those two funds that are the driver,” Teal said.
Rep. Bart LeBon, R-Fairbanks, asked Teal to explain the concept of the sweep and why a reverse sweep matters.
“Some of it is long term, some of it is hypothetical and some of it is urgent and very early,” Teal said.
He said a vaccine evaluation fund wouldn’t be missed until there was some kind of outbreak, but the higher education fund is something that will have an impact within the coming weeks.
“I think the higher education fund is kind of the best example of why to reverse the sweep as quickly as possible,” Teal said.
Merrick asked if there are projects in the bill being discussed that are funded by the CBR that would normally be funded by the general fund.
The answer was yes.
Rep. Neal Foster, D-Nome, said he thought Alaskans have plainly voiced support for a reverse sweep, which is why taking a second stab at the vote is imperative.
“If we don’t achieve a reverse sweep, then we won’t see power cost equalization,” Foster said.
Rep. Kelly Merrick, R-Eagle River, asked why representatives were called back to Juneau to vote on a bill that’s nearly identical to a bill that was widely supported but fell short of a three-fourths vote required to draw from the CBR.
Merrick said she came to Juneau to compromise and the bill is not a compromise.
Johnston said in light of concern about the lack of a reverse sweep it’s hoped the vote goes differently this time around.
Rep. Colleen Sullivan-Leonard, R-Wasilla, said she’s “mad as heck” about being away from her hometown to be in Juneau considering a bill that isn’t a compromise.
“It’s moving backwards,” she said.
Rep. Any Josephson, D-Anchorage, asked if there has been “head room” as high as $500 million, which is what he recalled the total being in 2015.
Teal said in the past the total has fallen between $500 million and $100 million in the past.
Rep. Cathy Tilton, R-Wasilla, is asking about language included in the bill that would allow funding for deficits created by appropriation bills to come from the CBR.
Tilton would like to avoid future bills creating large draws.
Legislative Finance Director David Teal said that section of the bill is complex, and language could be added to prevent future large draws.
Tilton also asked about the $250 million in “head room” and why it was needed if deficit funding was also part of the bill.
Johnston and her staff said the deficit filling language is for managing appropriations that have been made while the “head room” allows for future appropriations that may be required because of wild fires and earthquakes.
Johnston, co-chair of the finance committee, has come out swinging in favor of the bill, which she said would make Alaska safer.
Representatives are taking seats for the House Finance meeting. This should be the last meeting of the day and set the stage for what the Legislature will be voting on tomorrow.
The House is adjourned until 1 p.m. tomorrow, so a reverse sweep and capital budget won’t be heading to the governor today. The Finance Committee will talk more about the bill passed by the Senate earlier today in about 30 minutes.
The motion has been adopted.
Johnston announced the House Finance Committee will meet at 3:15 p.m.
There’s been an at ease to allow for a flurry of discussion about the motion.
It will be interesting to see what happens.
This could wind up being a long day.
Rep. Jennifer Johnston, R-Anchorage, made a motion to waive a rule and add SB 2002, the Senate’s “reverse sweep” capital budget bill, to today’s House Finance Committee meeting.
The House bells are ringing and representatives are making their way to the chambers.
It’s likely SB2002 will be referred to the House Finance Committee. It’s possible this isn’t the last trip to the House floor for today, but things would need to move especially quick for that to happen.
Hoffman moved the Senate be adjourned until 2 p.m. tomorrow.
There was a unanimous 19-0 vote to substitute the Senate’s bill for the governor’s bill; an 18-1 vote for the effective dates of the vote and a unanimous vote for the CBR portions of the bill.
The bill will now go to the house. It needs a three-fourths vote to pass.
Sen. Bill Wielechowski, D-Anchorage, said the bill being debate is similar to the one that passed with unanimous support more than a month ago.
“The consequences of not reversing that sweep are pretty stunning and not what many anticipated,” Wielechowski said.
He said that’s because there’s a “new interpretation” of what can be swept.
“Some of the consequences of not passing this, we do not have funding for our crime bill,” Wielechowski said.
Plus, he said power cost in rural Alaska would sky rocket because the Power Cost Equalization fund could be swept.
The House Finance Committee’s meeting is delayed to the call of the chair. That could be to enable the committee to move along the Senate’s capital budget.
“There is no subversive or secretive issues in this bill,” said Sen. Bert Stedman, R-Sitka.
He said many of the matters in the bill have already been debated and discussed at length.
Stedman said it’s important that there be some funds set aside for contingencies. He pointed out there have been fires all over the state this year.
“We’re not going to let our cities burn because we’re too tight not to have any head room,” Stedman said.
He said he does not support chaos as a method for getting to a solution.
Sen. Peter Micciche, R-Soldotna, said he also stands in support of the bill although it is not “thrilled” support.
There seems to be bipartisan support for the bill, but whether it will get the support it needs in both the Senate and House remains to be seen.
Reinbold said the bill being considered was put together via “back door meetings.”
Coghill said as a point of order the bill was assembled in the open in public meetings.
Reinbold said that’s “very debatable.”
She said if she votes in favor of the bill it’s because she supports infrastructure, WWAMI and other things included in the bill. However, she said she is leaning toward no and hopes the governor has his veto pen ready.
“I hope we don’t continue to do business like this because I find it unacceptable,” Reinbold said.
Sen. Jesse Kiehl, D-Juneau, is speaking in favor of the bill and about the reverse sweep.
He said reversing the sweep keeps occupational licensing fees down. Those fees affect professions such as registered nurses and licensed Realtors.
“The bill you have before you fills critical funding gaps in the capital budget,” von Imhof said. “This bill is essentially the same bill both bodies passed in June.”
She said one of the reasons the bill needs to pass is that it includes $73 million in state match in order to receive more than $750 million in federal money.
The bill’s funding source would be the CBR rather than the general fund, von Imhof said.
“This bill also provides up to $250 million in head room for supplementals we expect might be coming down the line in the next several months,” she said.
That buffer space, von Imhof said, is necessary for things such as wild fire damage or earthquake repairs.
She also spoke to the damage that could be caused by the lack of a reverse sweep.
The collective impact appears to be about $ million and create holes all over the budget von Imhof said.
There was a short at ease and a flurry of discussion.
Senate President Cathy Giessel, R-Anchorage, put the matter of a recces to a vote, and it failed 13-6.
Reinbold is doubling down on her objection.
“There are huge implications in this bill, and I think my district would want me to know and understand before I voted on this bill,” Reinbold said. “I think it’s critical that the public gets to weigh in on this bill. I think it’s critical.”
Reinbold said “a lot of people want to get on an air plane and get out of here.”
Sen. John Coghill, R- North Pole, said as a point of order that discussion should pertain to the bill.
Begich said most of the language in the bill was discussed by the Senate and there was public testimony.
A 16-3 vote means the bill will move from second to third and final reading.
Sen. Natasha von Imhof, R-Anchorage made a motion to adopt changes made by the Senate Finance Committee to SB 2002, and Sen. Tom Begich, D-Anchorage, objected for explanations of changes to the bill.
Senate Majority Leader Lyman Hoffman, D-Bethel, moved to move the bill on, but there was an objection.
Von Imhof said the bill includes reverse sweep language and undo a handful of the governor’s vetoes.
Sen. Lora Reinbold, R-Eagle River, objects to moving the bill forward since it was finished last night and she would like it to be amended.
“I just got a copy of this bill hours ago, and I do not understand the implications,” Reinbold. “This is a big, important bill for me to understand. I am asking for a recess until my amendments are read.”
The Senate’s floor session is underway. There are 19 members present. For those keeping tally, there are more lawmakers in Juneau today than the 45 needed for a super majority vote.
They rang the bell, and Senators are making their way toward the Chambers.
There haven’t been bells yet, but the Senate is expected to have a floor session in about 15 minutes. A vote on SB2002 is expected. The bill is a capital budget that could reverse “the sweep,” which is an accounting quirk that empties multiple state accounts into the Constitutional Budget Reserve.
Since no “reverse sweep” was included in the budget the Legislature sent to the governor an unprecedented amount is currently set to be swept into the reserve.
The Senate’s session is now scheduled for 12:30 p.m. The House Finance Committee meets at 1 p.m. There could be more on the House floor before the day is done, but there’s nothing currently on the schedule.
There could be action later today since the House is at recess to the call of the chair. A House Finance Committee meeting scheduled for 1 p.m. and the Senate’s now-delayed floor session could pave the way for a vote on a PFD or capital budget bill.
At the very least, discussion of both matters is expected.
Right now, there’s nothing concrete on the day’s agenda until 1 p.m., but the Senate’s floor session could pop back up before then.
The Senate has been delayed to the call of the chair. There’s no estimate on when that will be at this time.
There’s the bells, so things should start soon. The Senate session should feature more activity than than the House since a bill for consideration from the governor on the calendar. After this, there’s nothing on the daily schedule until 1 p.m.
The House is recessed. Next up is the Senate.
I’m seeing and smelling a lot of coffee in the Chambers on this gray Saturday morning. House Speaker Bryce Edgmon, I-Dillingham, gaveled things into session. There are 29 representatives present today. Nine are excused and two are absent. One of the excused is Rep. Andi Story, D-Juneau.
The bells have sounded and folks are beginning to mosey into the House Chambers. Nothing is on the floor calendar right now, but the House Finance Committee has a 1 p.m. meeting, so this won’t be the last action of the day for representatives.
Parking around the Capitol is much easier to find on a Saturday than during the week. There’s still some time before things get started today.
Everybody’s working on the weekend.
The House is adjourned until 10:30 a.m. and the Senate is adjourned until 11 a.m.
The bill was introduced via the rules committee by request of Gov. Mike Dunleavy.
• Contact reporter Ben Hohenstatt at (907)523-2243 or email@example.com. Follow him on Twitter at @BenHohenstatt.