Alaska State Capitol

Alaska State Capitol main entrance in 2017. 

The Alaska House of Representatives is expected to take a procedural vote Monday to pass a complete budget and avoid a government shutdown this week.

Gov. Mike Dunleavy has refused to sign the state budget, labelling it “defective” after the House did not have the votes to adopt the July 1 start date for the fiscal 2022 state spending plan, known as the effective date clause.

House Speaker Louise Stutes, a Kodiak Republican, maintained that the governor has the authority to sign the budget bill without the effective date clause.

“This is not a drama vote,” Republican Rep. Bart LeBon said Sunday. “It is a procedural routine vote. I think that come tomorrow (Monday), we will pass an effective date vote.”

The budget bill will take effect 90 days after its adoption, which is Sept. 30, without passage of the effective date clause, according to the governor’s office. 

The attorney general has filed a lawsuit against the Alaska Legislative Affairs Agency to get a definitive ruling. Under the Alaska Constitution, laws take effect 90 days after enactment, unless the Legislature specifies another start date.

“The end of the 2021 fiscal year is fast approaching and there will be no operating budget in effect to support [the] state government when the new fiscal year begins on July 1,’’ the lawsuit states.

Attorney General Treg Taylor’s “position is that this provision is mandatory and thus, because the Legislature did not provide for another effective date, the operating budget bill passed by the Legislature is not effective until 90 days after enactment.”

Meanwhile, state employees would be laid off, and many state services shut down Thursday, without a fiscal 2022 budget.

Twenty-seven House members will need to pass an effective date clause of July 1. Previously, the measure failed in the House but passed in the Senate.

‘Philosophical division’

LeBon, a Fairbanks Republican, said there has been a “philosophical division” in the Legislature over the future of the Permanent Fund Dividend program.

“Some feel the Permanent Fund dividend formula should be in the Constitution,” he said, referring to a proposal by Dunleavy to enshrine in the Constitution a 50-50 split between Permanent Fund revenues for the dividend and government services.

The proposal would require a two-thirds vote in each chamber and then advance to a statewide ballot.

“There is a division in the House and Senate over that question,” LeBon said. “Republicans are unified in trying to minimize tax policies, individual or corporate or any other broad-based tax question."

But he added: “The PFD policy has division … Do you seek a PFD formula in statute that needs to be modified, or do you embed it in the state Constitution?

“I don't want to see it in the Constitution. I think it would be a one-way direction. It would be hard to modify if the day came that the state needed to do that.”

LeBon said he would support combining the earnings reserve account into the corpus of the Permanent Fund to make it a “true public-purpose endowment.”

He said that the PFD formula may be discussed when the Legislature reconvenes again in August for another special session, at the request of the governor. 

“We can certainly debate the PFD formula,” he said, as well as funding for capital projects, the oil and gas tax credits and the so-called reverse sweep, which facilitates funding for rural power subsidies, a college scholarship program and other special projects.

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