No budget deal on PFD as Legislature enters final week
May 10, 2023
With a week remaining in Alaska’s regular legislative session, leading lawmakers say they still haven’t reached agreement on a deal to finish the state budget and end the session on time.
“We are meeting daily with the Senate … just working on finding some way to come together to put this kind of ‘endgame’ package together, which I can tell you right now, we don’t have the details as of yet,” House Speaker Cathy Tilton, R-Wasilla, said last Friday.
Since 2015, odd-numbered years have brought tortuously long arguments over the budget as lawmakers debate the amount of the Permanent Fund dividend.
Without a state election season to encourage quick action, as in even-numbered years, regular legislative sessions have been followed by special 30-day sessions, and lawmakers have frequently approached the July 1 deadline for the start of the fiscal year.
This year, the debate is again over the Permanent Fund dividend. The Alaska House has approved a draft budget that contains a dividend of about $2,700 per recipient and a special one-time $175 million boost to public school funding.
Paying for both of those items creates a substantial projected deficit, which would have to be covered by spending from the state’s principal savings account, the Constitutional Budget Reserve. But spending from the reserve requires a supermajority of the House and Senate, and the House vote failed because of opposition from the predominantly Democratic House minority.
That’s left the House budget proposal partially unfunded, and the Senate has advanced an alternative.
That alternative includes a dividend of about $1,300, the same one-year increase in state funding for schools, and no spending from the budget reserve.
During a May 2 news conference, leading senators said they’re unlikely to approve spending from the reserve, which stands at $2.6 billion. The state drew more than $1 billion from the reserve to cover deficits in the budgets that ended in both 2020 and 2021.
“This is all a process, a negotiation process, a compromise that has to take place. I think we’ve made it clear where we are. I believe there’s a real disinterest among most senators to go into our savings account when (savings) are as low as they are,” said Senate President Gary Stevens, R-Kodiak.
House Minority Leader Calvin Schrage, an Anchorage independent, said he “kind of” likes the Senate budget, “so I say we vote for that thing.” However, although he supports the Senate budget plan, he doesn’t see the votes in the House to pass it.
“What is the other option, and where do you go from here?” Schrage said.
“We still have lots of time. There’s still lots of ways we can get to the end,” Tilton said.
The adjournment deadline is May 17.
The Alaska Beacon is an independent, donor-funded news organization. Alaskabeacon.com.