Alaska Capitol

In recent weeks, the Alaska Legislature passed two bills that, if approved by Gov. Mike Dunleavy, could drastically change the fiscal path the state is currently on. 

Senate Bill 2002

More than a week and a half ago, the Senate passed Senate Bill 2002 to fund the capital budget and approve the restoration of a group of subaccounts whose funds were swept into the Constitutional Budget Reserve on July 1, the beginning of the new fiscal year. These included funds for the Power Cost Equalization program, which seeks to mitigate higher energy costs for communities in rural Alaska, and the Alaska Higher Education Investment Fund, which benefits the Alaska Performance Scholarship and other education grants. 

The House tried three times to pass the capital budget, only succeeding on the final try on Monday by gaining just barely enough support to meet the three-quarters vote threshold necessary to draw from the CBR. The House passed the bill 32-6, with two members excused and absent from the vote. 

House Bill 2001

House Bill 2001 is an appropriations bill that restores approximately 80% of Dunleavy’s $444 million in operating budget vetoes and provides for a $1,605 Alaska Permanent Fund dividend.

The dividend was not originally part of the bill that was passed by the House as the group of 40 representatives was unable to reach agreement on what the dividend amount should be. However, an amendment including the $1,605 dividend was added to the bill after it reached the Senate. The House concurred with the Senate changes Wednesday morning. The House passed the original bill 21-10 on July 24, with nine excused and absent from the vote. The Senate, after amending the legislation, passed the bill 17-1 on Tuesday, with two members absent and excused from the vote. 

As passed by both the House and the Senate, the bill would restore $110 million in funding for the University of Alaska — Dunleavy vetoed $130 million — and put back funding to areas of the budget such as Medicaid; the Senior Benefits Payment Program and adult dental programs; Alaska State Council on the Arts; public broadcasting; prekindergarten and early education programs; the Ocean Ranger program; community assistance grants; Alaska Legal Services; the Village Public Safety Officer program; and others.

What’s next?

The capital budget was transmitted to the governor Wednesday. As of Thursday evening, there was no word on when the governor may act on the bill or return it to the Legislature with vetoes. The bill is due back from the governor by Aug. 17.

Mike Dunleavy

Dunleavy noted his appreciation that the Legislature passed the capital budget last week but said he and his team will be reviewing the bill and would not confirm whether or not he would veto certain items. 

“While I intend to sign SB 2002, I will exercise my line-item veto authority where necessary,” Dunleavy said.

Austin Baird, a spokesman for House Speaker Bryce Edgmon, I-Dillingham, said the governor is unlikely to veto the bill because it has enough support to override reductions. The bill gained 51 votes between both the House and the Senate.

House Bill 2001 has not been transmitted to the governor. Baird noted the bill is still in the process of transmittal with certain technical language being ironed out. 

The governor called the bill a disappointment in recent discussions with members of the media. 

“The add-backs to spending — to the tune of $400 million — are yet another attempt to blow up the size of government. I stand by the decisions made on June 28 and the focus we’ve made on providing a sustainable budget and sustainable systems,” Dunleavy said. “While we will consider a limited number of additions to the budget, we consider the vast majority of the FY20 budget final. It’s time to move forward.”

House Majority Leader Steve Thompson, R-Fairbanks, said the Legislature does not plan to meet until hearing from the governor’s office on either of the bills.  

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