The Alaska Legislature adjourned without passing a budget Wednesday night, as the House refused to consider the revised version of the spending plan sent over by the Senate just five hours before the midnight deadline, prompting Gov. Mike Dunleavy to call a special session beginning at 10 a.m. Thursday.
Senate leaders claimed they passed a responsible budget that increases education funding and provides a reasonable $1,300 Permanent Fund dividend. House leaders, whose primary difference was favoring a $2,700 PFD that would result in a $600 million deficit, said they felt shut out by numerous irregular procedures by the Senate including getting a take-it-or-leave-it budget they didn’t have time to properly consider.
“There were many members who felt that it was very important to have that opportunity to take a look at that budget, especially since the budget was not a process that was done between both bodies,” House Speaker Cathy Tilton, a Wasilla Republican, told reporters after the House adjourned.
The vote to adjourn was 22-18, with all members of the Republican-led majority voting in favor. Juneau Democratic representatives Sara Hannan and Andi Story voted against.
While Dunleavy’s proclamation calls for the standard 30-day special session, hope the House might take up the Senate’s version of the budget bill when it gavels in Thursday and pass it relatively quickly was expressed by Senate Rules Chair Senator Bill Wielechowski, an Anchorage Democrat.
“If they concur we’re done tomorrow,” he said.
House Minority Leader Calvin Schrage, an Anchorage independent, said he was disappointed by the decision to adjourn without passing a budget, but acting quickly to pass one at the start of the special session is feasible. One possibility discussed by many lawmakers Wednesday was the mostly Democratic 16-member House minority might be able to get five crossover votes from the Republican led majority (there is also one Republican not affiliated with a caucus).
The most likely alternative is a conference committee of three House and three Senate members who work out a compromise budget bill, which House Rules Chair Craig Johnson, an Anchorage Republican, expressed a strong preference for.
“I think this is the first time that there hadn’t been a conference committee in 30 some-odd years,” he said. “We want to do the process, we want to go through it. We want to have an opportunity to go through their budget, we want opportunity for everyone to go through their budget, because that’ll all be discussed in the conference committee and it won’t be behind closed doors.”
Dunleavy, who was on a bear-hunting trip elsewhere in the state Wednesday, issued a prepared statement declaring “I have faith in the Legislature that an operating budget can be completed and passed in short order.”
“Unfortunately, the House and Senate could not agree on an operating and capital budget and other important pieces of legislation,” Dunleavy said. “The people of Alaska need stability to ensure that necessary state services are funded. As a result, I’m calling a special session so the House and Senate can continue working together to arrive at a base operating budget that will provide for state government and essential services.”
The Senate made a series of last-minute changes that cut about $82 million in spending before passing the budget sent to the House. The cuts included $40 million to pay for the cost of a state government shutdown if a budget is not approved by the start of the fiscal year July 1, plus reducing by half allocations to a few programs such as child care provider assistance ($7.5 million instead of $15 million).
The Senate’s budget currently has a surplus of about $110 million, which can be “a second bite at the apple” allocated to capital improvement projects and other priority needs when the Legislature reconvenes next January, said Sen. Bert Stedman, a Sitka Republican who co-chairs the Senate Finance Committee.
Also, the Senate budget includes a provision that will give an “energy rebate” to Alaskans of up to $500 along with their 2024 PFD if oil prices during the fiscal year average higher than the $73 per barrel forecast.
While the Legislature failed to complete its mandatory business of passing a budget, one of Juneau’s three legislators got a significant last-moment victory. Democratic state Sen. Jesse Kiehl’s bill banning PFAS chemicals for most firefighting purposes was pasted into another bill the House just gave final approval to before adjourning.
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