Ten things to know about Alaska’s budget

The Alaska State Capitol in Juneau, Alaska, on October 19, 2017. (Becky Bohrer/AP Photo)
Between budgets passing and parts being vetoed, the reverse sweep and a divided Legislature, it can be a confusing time. But there are some essential facts that may be helpful to keep in mind:
  • This year is different.
  • The deep divisions over the budget have led to a series of unprecedented steps this year, from a month-long delay in the House organizing to Gov. Mike Dunleavy vetoing $390 million from the budget. These divisions paved the way for a period when the Legislature was literally divided, between Juneau and Wasilla.

  • The Legislature has passed a bill funding the capital budget, and Gov. Mike Dunleavy said he’s glad about it.
  • That means he’ll likely sign Senate Bill 2002, although he could still veto parts of it that he vetoed in an earlier bill. The bill allows the state to receive close to $1 billion in federal matching funds.

  • Federal dollars aren’t the only news in the capital budget funding bill.
  • Dunleavy’s signature also would mean the preservation of 54 separate state accounts, through what’s known as the “reverse sweep.”  These accounts fund power cost equalization; university scholarships and loans; medical education; vaccines; and other areas.

  • The Legislature reversing Dunleavy’s vetoes may not mean much.
  • Dunleavy still has the ability to veto these items again, and he’s indicated he will. On Twitter, Dunleavy said the reversals in House Bill 2001 are “yet another attempt to blow up the size of government,” and that he stands by the earlier vetoes. He also said he considers the vast majority of the budget to be final. So while the capital budget and items funded by the reverse sweep may move forward, other cuts will likely remain.

  • The university budget remains uncertain.
  • Dunleavy’s administration has indicated he could reduce the size of the cuts this year from $136 million to $96 million. But it’s not clear whether the governor will attach strings to the money that the university may find difficult to accept.

  • The Legislature may have passed a $1,600 permanent fund dividend — but that doesn’t mean that’s what Alaskans will receive.
  • Dunleavy could veto the funding, since it’s less than the full, roughly $3,000 PFD that Alaskans would receive if the state followed the formula in a 1982 law.

  • It’s possible there may not be a dividend.
  • The governor and all legislators say they want Alaskans to receive dividends this year. But they will have to agree on an amount. And the legislative majorities that passed the $1,600 PFD see a larger amount as unsustainable, threatening the future of the permanent fund’s earnings reserve and of PFDs. Dunleavy says government spending is unsustainable.

  • The Legislature may not be done for the year.
  • Senate President Cathy Giessel, an Anchorage Republican, and House Speaker Bryce Edgmon, a Dillingham independent, sent a letter to Dunleavy on Wednesday saying they’d like to have a third special session focused on the future of use of permanent fund earnings. They said they’d like to collaborate with the administration on the timing and location of the session. The next time the Legislature meets, it could consider overriding Dunleavy’s vetoes again.

  • The second special session is ending, but lawmakers will keep meeting.
  • A bicameral permanent fund working group is planning meetings to discuss the future of permanent fund earnings and the PFD. The work they do could lay the groundwork for a third special session.

  • We should know more next week.
  • That’s when the Legislature is likely to transmit the bill funding PFDs and reversing the vetoes to Dunleavy’s desk. It’s still possible Dunleavy will allow the $1,600 PFD to become law.

Related stories from around the North:

Canada: Justin Trudeau rehashes old federal funding in housing announcement for Nunavut territory, 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: Alaska Legislature passes capital budget funding, $1,600 permanent fund dividends, veto reversals, Alaska Public Media

Andrew Kitchenman, Alaska Public Media & KTOO - Juneau

For more news from Alaska visit Alaska Public Media.

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