House vote

This image shows how House lawmakers voted on the July 1 start date for the new budget bill to take effect. The House needed 27 votes, or a supermajority, for the so-called effective date to be approved. 

A state government shutdown was narrowly averted Monday after the House agreed by a one-vote margin to a July 1 start date for the Alaska budget to take effect.

The fiscal 2022 budget bill is now on its way to the governor’s office.

“With this afternoon’s vote on the effective date clause for the [fiscal year] '22 operating budget, the Legislature now has an appropriation that can be effective on July 1," Gov. Mike Dunleavy said in a statement released after the vote. "Once I receive the budget, and review individual items, I will make a decision on possible line-item vetoes and prepare the budget for implementation on July 1.

House approval just squeezed by after debate and disagreements.

A supermajority of 27 votes was needed to adopt a so-called effective date that aligned with the start of the new fiscal year.

Opposing the measure were Reps. Ban Carpenter, Mike Cronk, David Eastman, Ronald Gillham, DeLena Johnson, Christopher Kurka, Kevin McCabe, Mike Prax, George Rauscher and Sarah Vance.

“This is a trust issue,” Prax, a North Pole Republican, said in an interview after his “no” vote. 

Prax said he was objecting to “power politics in the Legislature, when there needs to be more effort to ensure that all voices are heard.” Prax said that leadership on committees and in the chamber often ignore concerns by rank-and-file members. 

Several of the dissenters had said on the House floor that the Legislature did not spend enough time on fiscal planning and that they had felt excluded from the process.

A concern included the size of the Permanent Fund dividend — set at $1,100 in the compromise budget bill. Some argued that the dividend should be set higher, given the robust gains of the fund, now valued at more than $80 billion. But the dividend amount is in question as it is partially paid with specific savings that did not pass a final vote earlier in the session.

The funding is expected to be addressed in August, when the governor calls the Legislature back for another special session.

Prior to Monday's vote, Republican Rep. Sara Rasmussen reminded lawmakers that they had plenty of time during the regular session to raise questions about the budget, spending and other concerns.

“There were no amendments with deep cuts to the budget,” Rasmussen said, adding that she was “confused” by some of the objections, since there were earlier opportunities to take action. 

“This is a short window of time now. The hourglass is empty,” she said. “We need to take the vote. We cannot delay any longer.”

At issue was the risk of a government shutdown and the temporary layoffs of thousands of state workers without a new spending plan in place by July 1. 

Gov. Mike Dunleavy had sent the budget bill back to lawmakers, labelling it “defective,” without the July 1 start date approved by the House. The Senate approved the effective date clause.

Under the state Constitution, bills take effect 90 days after they are passed by the Legislature, unless the Legislature deems otherwise.

Layoff notices had been sent out by the state, warning workers of the potential shutdown. The state also had drawn up a list of essential services that would continue to operate during a shutdown.

The House met Monday with the purpose of taking another vote on whether to adopt the July 1 start date, which had previously failed. 

In advance of the vote, House members negotiated a letter of agreement outlining fiscal issues to address during the special session in August, including the need for a comprehensive fiscal policy and future management of the Permanent Fund dividend program.

The House coalition noted in a press statement after Monday’s session that lawmakers also approved a commitment by both the legislative majority and minority to work toward solving the state’s budget problems.

"I reiterate our coalition’s commitment to working in the next special session to find a solution to our state’s long-term financial problems and the divisiveness surrounding the Permanent Fund and dividend program," House Speaker Louise Stutes said.

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