The Alaska House of Representatives passed a state operating budget Sunday afternoon, sending the most recent conference committee version of the budget to the Senate and moving one step closer to avoiding a government shutdown, which would go into effect July 1.

This version of the budget came out of the House-Senate Conference Committee Saturday night and, according to Nome Democratic Rep. Neal Foster, has more than 270 differences from the House’s original operating budget passed out of the body in April. 

Nevertheless, 22 House members voted to pass the budget Sunday afternoon, with 15 members of the House Republican Minority voting against the bill. 

The bill makes $190 million in cuts from the current fiscal year’s budget, one of the biggest single-budget cuts to date. 

In larger areas of funding, the budget struck a balance between the House and Senate’s original budgets. 

The Conference Committee included in the budget the forward funding for K-12 education, which was approved last year, maintaining their stance against Gov. Mike Dunleavy’s claim that forward funding education is unconstitutional. 

The compromise budget also funds 100% of the Legislature’s obligation toward school bond debt reimbursement, a program that provides state funded financial assistance to school districts for school construction and capital improvements.

The University of Alaska is looking at a cut of $5 million from current funding levels. This matches the Senate proposal. The House had proposed cutting $10 million from the university. 

The Department of Health and Social Services is looking at a collective cut of $78 million, a far cry less severe than Dunleavy’s suggested $365 million cut.

The compromise budget added $15 million in supplemental funding to the state’s Medicaid program, ensuring an additional $75 million in federal match dollars.

The budget also moves $10.6 billion from the permanent fund earnings reserve to the funds constitutionally protected principal, essentially locking away the money from ready access. If approved, this move would leave just over $9 million left in the earnings reserve to be used to pay dividends and partially fund government.

The budget does not include a dividend. But Foster, one of the Budget Conference Committee co-chairs, clarified that the dividend is being examined as part of separate legislation.

Five of the six Fairbanks area representatives voted in favor of the budget. 

Fairbanks Republican Rep. Bart LeBon, a member of the House Finance Committee, said he was pleased with the end result.

“I thought the Conference Committee did a very good job of balancing the interests of the House and the Senate. The total budget I think is a responsible, balanced and realistic budget, and I’m pleased to have voted ‘yes’ on it,” LeBon said. “I would have liked to see the university held harmless and flat funded but this is a compromise I can live with.”

Rep. Grier Hopkins, D-Fairbanks, said he would have liked to see more money go toward addressing the state’s recidivism rates and investing in criminal rehabilitation programs, but overall he was happy with the budget. 

“I don’t agree with everything that’s in it, but I do feel that there are good important projects in there that I’m happy can move forward,” Hopkins said. 

Hopkins noted that he supported the move to keep the dividend in separate legislation. 

“We shouldn’t let the entire state shut down because we can’t agree on one thing that doesn’t have to be in the budget,” Hopkins said. 

Healy Republican Rep. Dave Talerico was the only Fairbanks area representatives who is a member of the House Minority.

Talerico said Sunday evening that he would have preferred state spending levels to be lower.

“During the amendment process earlier this session we, the House Minority, had a few amendments, some of them weren’t very big, but some would have helped lower spending and those, of course, didn’t get into the budget,” Talerico said. “I think we needed a little more down pressure on the budget.”

Talerico said he was uncomfortable with the choice to move $10.6 billion into the permanent fund corpus, noting he thought the amount was a little too high and adding that he would have liked the dividend to be dealt with in the budget.

“Over the years we’ve always had an appropriation line item in the budget for the dividend,” Talerico said. “I wouldn’t say I was amazingly comfortable that it wasn’t in the operating budget.”

The House also passed the Conference Committee version of the state’s mental health trust budget, which notably added $2.4 million to the state’s Pioneers’ Home program. A previously discussed budget cut to the program would have increased some residents’ monthly fees by as much as $8,000.

The Senate is expected to vote on the operating budget today morning. However, even if the Senate passes the budget, it still must be approved and signed by the governor. This presents possible complications as Dunleavy’s own budget proposal suggested cutting more than double the amount from the budget, particularly in areas such as health and social services and the university. 

Dunleavy has, on multiple occasions, threatened to use his constitutionally granted line-item veto power to rule out areas of the budget he deems too forgiving. It would take a vote of three-fourths of the Legislature, 45 of the 60 lawmakers, to overrule the vetoes.

Contact staff writer Erin McGroarty at 459-7544. Follow her on Twitter: @FDNMPolitics.