Legislature passes capital budget with divisions over $1,100 PFD

Rep. Gabrielle LeDoux, R-Anchorage, talks with House Majority Leader Chris Tuck, D-Anchorage, during a 2017 floor session. (Photo by Alaska House Majority Coalition Press)

It took the Alaska Legislature less than six hours to meet and pass the capital budget on Thursday. Though the agreement was hashed out well in advance of the legislators’ arrival in Juneau, there were lingering divisions over the funding for this year’s permanent fund dividend.

The capital budget approved doesn’t restore any money to this year’s permanent fund dividend, which has been cut in half through the budget, or last year’s dividend, which was vetoed in half by Gov. Bill Walker.

The PFD was a focus of much of the House floor debate on the bill, which ultimately passed 27-13. Much, but not all, of the dissent came from minority Republicans.

The division split the House Majority leadership with House Majority Leader Chris Tuck, D-Anchorage, and Rules Chair Gabrielle LeDoux, R-Anchorage, voting against the measure. Tuck said it was because the cut to the dividend unfairly burdens poor Alaskans with addressing the state’s deficit.

“Unfortunately this capital budget imposes a head tax on every Alaskan regardless of their income, regardless of their economic status,” he said. “If we put our hand in that cookie jar we’re never going to stop.”

LeDoux put forward an amendment during the initial passage of the capital budget to restore full funding of the dividend in light of no fiscal plan. The measure passed with mixed support from Republicans and Democrats.

The bill passed the Senate without much fanfare on a 15-4 vote. Republican Sens. Mike Dunleavy and Shelley Hughes were joined by Democratic Sens. Berta Gardner and Bill Wielechowski in opposing the bill. Sen. Tom Begich was excused.

The capital budget

The bill spends about $121 million in unrestricted general fund spending and brings in nearly $1.2 billion of federal cash for infrastructure projects throughout the state. Some of the big-ticket items include an additional $20 million for cashable tax credit payments (which brings the total to the annual statutory minimum), more than $7 million for the Kivalina school taken from other projects, $5 million for the University of Alaska’s deferred maintenance budget and $8 million more for community assistance payments.

A lot of the action in the capital budget came through reappriopriations from one project to another, with the beleaguered Knik Arm Bridge and Toll Authority and Juneau Access project being the favorite targets.

Rep. Justin Parish, D-Juneau, also voted against the capital budget over reappropriations that depleted more than half of the money in the Juneau Access Road project for other spending throughout the state. Some $21.3 million from the project went to capital projects in the greater Lynn Canal area and another $4.43 million went to Kivalina school.

To be signed by Tuesday

The bill is now headed to the desk of Walker, who already released a statement praising the bill’s passage. Walker warned that not passing the bill by Aug. 1 would harm and delay projects next year.

“I am pleased the capital budget was passed this afternoon. Alaskans can rest assured that construction and maintenance projects can continue, and jobs will be provided for them, their friends, and neighbors. I look forward to signing the capital budget prior to August 1,” he said.

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