Alaska State Capitol

Alaska State Capitol main entrance in 2017. 

The Alaska Legislature has adopted a state budget for fiscal 2022, after the Senate voted 11-6 Wednesday to approve the spending plan.

The House on Tuesday passed the budget by a narrow margin. 

“The operating budget is pretty much flat,” said Sen. Bert Stedman, who co-chairs the Senate Finance Committee.

“We have a balanced budget to put on the governor’s desk,” Stedman added. “He can run the state.”

The adopted budget is a compromise agreed to by negotiators from both chambers in a conference committee. It now advances to Gov. Mike Dunleavy for his signature. Dunleavy has line-item veto power and the authority to veto the entire spending plan.

Passage in the Senate Wednesday took two rounds of voting, after budget approval failed the first time, on a vote of 10-8, with two senators absent. Adoption required 11 votes.

The Senate briefly recessed and voted again, with Sen. Lyman Hoffman, a Bethel Democrat, changing his vote to yes.

Five Republicans and one Democrat opposed the budget. Three senators were absent for the second vote. 

Opposing the budget were Democrat Sen. Scott Kawasaki and Republican Sens. Mia Costello, Roger Holland, Shelley Hughes, Robert Myers and Lora Reinbold.

The Legislature has been in special session to approve the spending plan and the Permanent Fund dividend. The special session ends Friday. The new fiscal year starts July 1.

Prior to the Senate vote, Stedman said the dividend remains $1,100 in the state spending plan, although the House amount is now $525. 

“The division is what is the agreed upon funded amount,” he said.

But Senate Majority Leader Shelley Hughes said, “Based on the vote of the other body, this is a vote for a $525” Permanent Fund dividend.

Sen. Tom Begich interjected to say that “we are adopting the conference committee report,” which has the $1,100 dividend, and that Hughes needed to limit her discussion to the agreed-upon amount.

Stedman implored the Senate to adopt the budget, even with contention over the amount of the Permanent Fund dividend. 

He said that if the Legislature has to, it can return in August “to easily fund the dividend portion” at $1,100. “The appropriation already is on the books,” he said.

At issue was failure by the House to pass procedural votes to use budget reserves for programs that include college scholarships for Alaska’s high school seniors, school projects in the Mat-Su and subsidies for rural ratepayers, who have the highest energy costs in the state.

The Permanent Fund dividend (PFD) in the House also was reduced from $1,100 to $525. 

A similar procedural vote on the budget reserve, requiring three-quarters of the Senate to approve, also failed.

Senate leadership said that the programs can be fully funded by the Legislature later this year.

The focus of the debate Wednesday was on the Permanent Fund dividend.

“The budget is not a singular issue,” Sen. David Wilson said, urging fellow senators to approve the spending plan, after lengthy discussions about the dividend.

“Until the PFD has a final solution,” he said, “it will continue to be at the whims of us.” 

Contact political reporter Linda F. Hersey at 459-7575 or follow her at twitter.com/FDNMpolitics.