Legislators pass budget deal to fully fund K-12, pay $1,100 PFD and avert shutdown

Alaska State CapitolThe Alaska State Capitol as photographed in March 2017. (Photo by gillfoto/Creative Commons)

Update: The budget deal is on its way to Gov. Bill Walker with eight days to spare before the July 1 government shutdown deadline. The House and Senate met in floor sessions Thursday night to approve the budget deal reached earlier in the day. The Senate did so on a 16-1 vote and the did so on a 31-8 vote.

Sen. Shelley Hughes voted against the budget in a move that will land her on the outs with the Senate Majority. She’ll also lose her seat on Senate Finance, which she got when Sen. Mike Dunleavy pulled the same move on the chamber’s first vote on the operating budget. Dunleavy missed the floor session altogether because the Senate met before his flight landed.

Republican Reps. David Eastman, DeLena Johnson, Mark Neuman, George Rauscher, Lora Reinbold, Colleen Sullivan-Leonard, Cathy Tilton and Tammie Wilson cast the eight no votes in the House. They won’t face any similar consequences because they’re in the minority.

Both chambers approved the draw on the Constitutional Budget Reserve and the effective date of the bill.

The House also finally signed off on legislation to help the state battle the opioid crisis, concurring with changes made by the Senate. Walker amended the special session agenda to allow the vote.

Legislators left the floor session Thursday night talking about working on a fiscal plan next session, but Walker has other plans. With three quarters of the special session remaining, Walker added House Bill 111, the oil and gas tax credit bill, to the agenda late Thursday night.

A government shutdown is averted, but there’s more work to do to salvage the state’s finances.

Original story:

The operating budget conference committee has finished its work on a budget deal for Alaska. The operating budget was closed out this afternoon and is headed for the House and Senate floors for approval.

If approved—which is certain save for some major last-minute blowup or computer glitch—the deal would avert the July 1 government shutdown. Legislators say it should be approved by both chambers tonight.

The top takeaways from the budget deal is that it fully funds K-12 education, meaning the funding remains status quo from the current fiscal year at more than $1 billion. The Senate wanted to ax $69 million in K-12 funding as part of a move that’s long been considered leverage.

The dividend will be funded at $1,100 for this year under the deal. There could be something in the works given the House Majority’s reluctance to sign off on a PFD cut without a fiscal plan. The capital budget is still outstanding.

Also big news is the committee deleted the plan to pay for the budget with the permanent fund earnings reserve. That means there’s likely House Minority buy-in on the bill to get it the three-quarter votes needed to open the Constitutional Budget Reserve. The earnings reserve needs a regular majority vote.

That also bodes well for the effective date on the bill, meaning it’ll go into place in time to keep the lights on.

The committee also included $57 million for this year’s payment on oil and gas tax credits. It also included budget language signaling the end of the oil and tax credit program sometime during the next fiscal year. The language also says the Legislature will refuse to pay for cashable tax credits for work done on or after January 1, 2018.

Here are some of the other highlights from today’s session:

• Restores $2 million of cuts to Pre-K grants made by the Senate. Also restore $500,000 for Parents as Teachers and $320,000 for Best Beginnings grant program, both eliminated by the Senate.

• Reverses Senate bid to deny Gov. Bill Walker’s request to increase awards for the Alaska Education Grant ($125,000) and for the Alaska Performance Scholarship ($250,000).

• The committee included a $153,000 cut to abortion services provided in fiscal year 16. The committee initially moved to restore the funding, but House Minority member Rep. Lance Pruitt objected during the Wednesday meeting.

• More on the budget deal is included in yesterday’s story on the conference committee’s work.

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