The Alaska Legislature adjourned its regular session on May 20, one day earlier than expected, after passing a “maintenance level” state budget that contains a $1,000 Permanent Fund dividend.
“I would like to thank all of you for getting to this point: a day early, and before midnight. Pretty remarkable,” said Senate President Gary Stevens, a Kodiak Republican.
Legislators adjourned hours after overriding Gov. Mike Dunleavy’s veto of a major education bill. During the time in between, they passed a series of bills, including a ban on payday lending, collecting the state car rental tax through online services like Turo, and policies for prisoners’ use of tablet PCs, among others.
During the session, legislators contended with falling oil revenue. Legislators didn’t pass any new taxes or increases in oil taxes, instead adopting significant budget cuts.
The Alaska House navigated partisan divisions that left its majority coalition — 14 Democrats, 5 independents and 2 Republicans — with only a one-vote margin over a 19-person House Republican minority.
That coalition majority, and a similar one in the Senate, had to negotiate with a governor who has significantly different policy views from the coalitions.
It was the first time since 2018 that the Legislature did not reach the constitutional limit of 121 days to complete the session, though the 2020 session was interrupted by a seven-week break due to the COVID-19 pandemic.
“In a year where the House was sharply divided in terms of numbers, oil prices sank, we did our best to work with the governor, who, at many times, was not seemingly here in the building, and we put it all together,” said House Speaker Bryce Edgmon, an independent from Dillingham.
House Minority Leader Mia Costello, an Anchorage Republican, said her caucus wasn’t satisfied with the result.
“I think we’re disappointed that we didn’t address more issues related to energy and the challenges we have and the opportunities that we have with resource development and energy and dovetailing with the president and our congressional delegation,” she said.
One of the Legislature’s final acts before adjournment was to pass the state’s operating budget for the fiscal year that starts July 1.
“You could say that both the operating and the capital budget, the two main budgets, were maintenance-level budgets,” Edgmon said.
The capital and operating budgets, including money for next fiscal year and changes to the current fiscal year, spend $6.2 billion, when looking only at general-purpose state spending.
General-purpose state spending is down significantly. The enacted budget bills from last spring totaled more than $6.5 billion.
Legislators started the budget-drafting process with the expectation that North Slope oil prices would average $68 per barrel in the next fiscal year.
By the end of the session, that expectation had dropped to $64, and the federal government — which pays for about 40% of the combined budget bills — had begun cutting its contributions.
As revenue projections declined, legislators slashed programs from the budget, including things like new state troopers for the Matanuska-Susitna Borough.
A relative handful of budget increases made it through the process — money for mental health treatment in Anchorage, early childhood education programs, and child advocacy centers, which help the survivors of child sexual abuse.
Those increases — and all other parts of the budget — are subject to approval by the governor, who has the power to veto individual line items. Every year of his term, Dunleavy has vetoed significant amounts from the budget.
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