State Sen. Bert Stedman, a Sitka Republican who co-chairs the Senate Finance Committee, details a list of 24 projects costing about $34 million that were added to the state budget during negotiations with House members Thursday. Behind Stedman in the audience section is nearly the entire 16-member House minority caucus, which voted in favor of the budget along with 10 members of the Republican-led House majority. (Mark Sabbatini / Juneau Empire)

State Sen. Bert Stedman, a Sitka Republican who co-chairs the Senate Finance Committee, details a list of 24 projects costing about $34 million that were added to the state budget during negotiations with House members Thursday. Behind Stedman in the audience section is nearly the entire 16-member House minority caucus, which voted in favor of the budget along with 10 members of the Republican-led House majority. (Mark Sabbatini / Juneau Empire)

Unusual House coalition OKs budget to end special session on first day

10 members of Republican-led majority join minority after $34M in targeted capital projects added

This is a developing story and will be updated.

A special session of the Legislature lasted just one day as a remarkable coalition of House majority and minority members voted Thursday evening to pass a bill for next year’s budget after the Senate added 24 capital improvement projects at the request of individual House members during hours of closed-door negotiations.

All 16 members of the mostly Democratic minority were joined by 10 members of the majority in passing the budget by a 26-14 vote after virtually no debate or discussion. Majority members who rejected the budget bill a day earlier saying the Senate wasn’t sufficiently seeking House input during the process said Thursday’s discussions resolved those issues.

Key provisions of the budget include a $1,300 Permanent Fund dividend favored by the bipartisan Senate majority rather than the $2,700 PFD the Republican-led House majority was seeking and a one-time increase of $680 in per-student education funding that is the biggest increase in state history. It also contains an $84 million surplus that can be used for additional capital projects or other needs when the Legislature reconvenes.

“I had certainly some challenges with a number of things in there,” said DeLena Johnson, a Palmer Republican who voted for the budget. “But what I didn’t want to see was a government shutdown. And I didn’t want to bring it down to the brink. And I thought it was important that we made sure and did the very best we could as far as negotiation right now to try to move the process forward. And we don’t need any more uncertainty in Alaska right now.”

Among the capital projects added was $5 million for the reconstruction of the public library in Palmer. Other projects such as $7 million for construction of a veterans cemetery in the Fairbanks area, $3 million for contaminated materials abatement at a Fairbanks hotel, $5 million for a Wasilla Airport runway extension, $5 million for a Dillingham harbor project, and nearly $5 million for a Talkeetna water and sewer project also are in the locales of majority members who voted in favor of the budget.

House and Senate leaders denied the extra capital projects were to “buy” the votes of enough House majority members to pass the Senate’s version of the budget.

“There were several projects, but they were all projects that the majority wanted,” Senate President Gary Stevens, a Kodiak Republican, said after the Senate approved the revised budget and before the House voted on it. “We worked off their list and that’s the majority projects that were done that budget.”

House majority and minority leaders gather around House Speaker Cathy Tilton, R-Wasillia, as she confers with House Chief Clerk Crys Jones before a floor vote on a budget bill that passed during the first day of a special legislative session Thursday night. (Mark Sabbatini / Juneau Empire)

House majority and minority leaders gather around House Speaker Cathy Tilton, R-Wasillia, as she confers with House Chief Clerk Crys Jones before a floor vote on a budget bill that passed during the first day of a special legislative session Thursday night. (Mark Sabbatini / Juneau Empire)

Majority and minority maneuverings

House leaders said they also didn’t know ahead of time how the budget vote would turn out and many of the new items on the projects lists were being seen for the first time by members just before the floor session started.

“I know that there are members of our caucus that had money in the capital budget that did not vote for this,” said House Majority Leader Dan Saddler, an Eagle River Republican. “So the allegation that there’s some kind of purchase going on is not true.”

Saddler and House Speaker Cathy Tilton of Wasilla were among the Republicans voting no. Tilton said afterward she doesn’t expect the majority coalition to change next session despite the large number of defectors on the budget vote.

“I think the majority will stay strong because everybody was allowed to vote how they felt they needed to vote,” she said.

Lawmakers spent most of Thursday meeting in various groups behind closed doors before the Senate met just after 5 p.m. to quickly pass an amendment adding the new projects to the budget bill.

“They’re very good amendments, and well thought out and recommended individually by our colleagues down the hall in negotiations,” said Sen. Bert Stedman, a Sitka Republican who co-chairs the Senate Finance Committee, during the floor session. “These were not selected by the Senate, they were selected by the other body.”

Sitting in the audience section behind Stedman’s desk at the rear of the chambers was nearly the entire House minority caucus, a sight a couple of longtime legislators said they have not seen before. It signaled the unusual House vote that occurred about 90 minutes later, but House Minority Leader Calvin Schrage, an Anchorage independent, said the bill also reflected compromises by his caucus.

“This budget we’re seeing today does not include everything we would have put in if we were in the majority, but it’s a budget that does make some of the investments in things that we are focused on,” he said.

Among the biggest disappointments was failing to pass a permanent education funding increase since it means districts will be facing unpredictability about how much money they will have when they begin preparing their budgets this fall and winter, said Rep. Andi Story, a Juneau Democrat.

Leaders in the House and Senate said that while they discussed provisions of the budget with Gov. Mike Dunleavy and largely tried to fund his priorities, no agreements exist to prevent him from vetoing specific line items.

Dunleavy issued a proclamation ordering a 30-day special session immediately after the House adjourned without passing a budget Wednesday night. House Rules Chair Craig Johnson, an Anchorage Republican, said at the time he wanted a conference committee of House and Senate members to use the special session to draft a compromise budget — the usual process for reaching a final spending plan — but after adjourning Thursday said the Senate’s new budget that he voted for was a more practical solution.

“I came to the conclusion that in 30 days we’ll be right here at a cost of how much and I would prefer not to have voted for (the budget),” he said. “But when I weighed the shutdown, the cost, the practicality, I’m a pragmatist. I’ll fight for what I believe in. But at the end of the day I think this is the best we could get.”

The Legislature, while adjourning until next January, may not be done with their work for the year yet. Dunleavy is suggesting he may call a special session to work on a long-range fiscal plan involving multiple elements, and House and Senate leaders said they are expecting such a session to occur in October.

A similar special session was called in 2021, and while a bipartisan work group did make recommendations for achieving long-term fiscal stability, it did not endorse specific revenue sources.

What else got accomplished

About 30 bills and nearly 20 mostly non-binding resolutions passed the Legislature during the regular and special sessions. The bills Dunleavy either will or won’t sign into law range from his potentially billion-dollar “trees” proposal to enter the carbon credits market to establishing June 9 as Don Young Day.

The carbon bill, one of two by Dunleavy, essentially seeks to collect “offset” payments from polluters or environmental/climate entities in exchange for leaving carbon-absorbing wild areas such as forests undisturbed. Legislators expressed some skepticism and had a lot of questions at the start of the session after Dunleavy proclaimed Alaska could earn more than a billion dollars a year in carbon markets, but after extensive hearings that produced a more modest set of expectations the bills passed by wide margins in both chambers.

There were, however, questions by a few legislators — and many residents — about whether Alaska was risking its natural security by allowing countries such as China to buy carbon leases for large land parcels and/or risking its economic future by locking off the state from resource development. But by the end of the session most lawmakers were enthusiastically rebutting such questions.

“It does not lock up state land, it does not put tax on Alaska, it does not limit emissions,” said Sen. Bill Wielechowski, an Anchorage Democrat, during floor debate last Monday before the bill passed by a unanimous vote.

Another environmental bill that passed bans PFAS chemicals for most firefighting purposes, which originally was introduced by Sen. Jesse Kiehl, a Juneau Democrat. Its provisions were pasted into another bill regulating refrigerants so that it could pass both chambers before the regular sessions ended Wednesday.

Among health-related measures, another high-profile bill of Dunleavy’s extends Medicaid eligibility for new mothers to 12 months instead of 60 days, while a related bill will allow residents providing home care for the elderly and disabled to qualify for Medicaid payments. A bill rushed through on the final day will bring Alaska’s pharmacy regulations into compliance with federal rules that will become mandatory in November.

Other bills prevent gun shops from being closed during disaster declarations, require the state to issue photo IDs to people upon their release from prison and allow people to get commercial driver’s licenses without having a regular license for a year beforehand.

• Contact Mark Sabbatini at mark.sabbatini@juneauempire.com.

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