Alaska Legislature passes capital budget funding, $1,600 permanent fund dividends, veto reversals

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Rep. Dave Talerico, R-Healy, speaks in favor of Senate Bill 2002, which would fund the capital budget and maintain the power cost equalization and other funds. The draw from the Constitutional Budget Reserve in the bill passed, 32-7, on July 29, 2019, in the House chamber. (Photo by Andrew Kitchenman/KTOO and Alaska Public Media)
The Alaska Legislature passed two major bills on Monday.

One would fund the capital budget. Gov. Mike Dunleavy said he’s glad it passed.

The other bill would fund permanent fund dividends at $1,600 and reverse most of Dunleavy’s line-item vetoes.

But Dunleavy calls that bill “a disappointment.” He expects to veto parts of the bill again.

“I would anticipate that there will be reductions,” he said in a phone call with reporters. “How much and in what order, what categories and what services, that’s to be determined. … The idea behind this is not quote ‘to harm Alaska.’ The idea behind this is to get a sustainable budget.”

Senate Bill 2002 – the capital budget

The morning began with the House voting for the third time in just over a week on Senate Bill 2002. This bill would fund the capital budget by drawing $176 million from the Constitutional Budget Reserve. It passed by 31 to 7, a one-vote margin after failing by one vote a week ago.

Healy Republican Rep. Dave Talerico voted for the draw, after being absent last week for health reasons. Talerico has advocated for budget cuts, but said funding medical education is among the reasons he supports the bill.

“The bulk of the constituents from my district that have contacted me by far and away would like us to move forward with this,” said Talerico, who added that it was “not an easy decision for me, because I’ve taken some pretty strong positions in the past. But I would say that I am here to represent the majority of people that live in my district.”

Eagle River Republican Rep. Sharon Jackson voted against the draw.

“There has been no compromise,” she said. “Nothing has changed since the last time we voted. And I find that pretty sad.”

In addition to funding the capital budget, the bill also maintains 54 separate accounts that would otherwise be swept into the CBR. They include funds for power cost equalization; college grants and scholarships and medical education; and vaccines. The Senate already passed the bill.

House Bill 2001 – permanent fund dividends and veto reversals

In the afternoon, the Senate passed House Bill 2001 by a 17 to 1 vote.

The body amended the bill, by an 11 to 9 vote, to pay a $1,600 PFD instead of the full, roughly $3,000 PFD approved Saturday by the Senate Finance Committee.

The bill also would reverse all but $21 million of Dunleavy’s $390 million in vetoes, and adds another $5 million in Alaska Marine Highway System funding.

Sitka Republican Sen. Bert Stedman says the veto reversals would help Alaska communities. He cited $30 million in community assistance as one example.

“That will put direct, downward pressure on property tax, keep it along the lines of what it was last year,” Stedman said. “Without those funds … (it’s) just a matter of time before property tax goes up in the all the organized communities around the state.”

Eagle River Republican Sen. Lora Reinbold was the only senator to vote against the bill. She supports a full PFD under the formula in a 1982 law.

“I think it’s wrong to break the statute, and so therefore I cannot vote for this bill,” Reinbold said. “I will be a no vote to be a voice of fiscal responsibility for a future — I don’t think government can continue to grow and get bigger.”

Reinbold may lose her Senate Labor and Commerce Committee chair for voting against a budget bill.

Two other senators who chair committees — Shelley Hughes of Palmer and Mike Shower of Wasilla — were absent for the vote on the bill after having voted against the $1,600 PFD amendment.

The House agreed to the Senate’s changes in a 23 to 15 vote.

The second special session is scheduled to end by Aug. 6 at the latest.

Related stories from around the North:

Canada: Conservative Party leader travels to Yukon, outlines vision for Northern Canada, CBC News

Finland: Finland’s new gov breezes through no-confidence vote over its agenda, Yle News

Sweden: Swedish Centre Party promises tax break for rural northerners, Radio Sweden

United States: Anchorage, Alaska declares a civil emergency over looming cuts, Alaska Public Media

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Andrew Kitchenman, Alaska Public Media & KTOO - Juneau

Andrew Kitchenman, Alaska Public Media & KTOO - Juneau

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