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Timeline: The road to this year’s budget

  • Author: James Brooks
  • Updated: August 19, 2019
  • Published August 19, 2019

• Nov. 6, 2018: Michael J. Dunleavy is elected governor of Alaska.

• Nov. 8, 2018: Dunleavy confirms in an interview that he will follow through on campaign pledges to pay a traditional Permanent Fund dividend. “People should expect, the historical calculation that went on for decades prior to (SB 26) is going to be the dividend," he says.

• Nov. 26, 2018: Before he leaves office, Gov. Bill Walker unveils a “balanced budget” plan that includes an $1,800 Permanent Fund dividend and slightly increased spending on state services. The budget is based upon the expectation that oil prices will average $75 per barrel in the next fiscal year.

• Dec. 1, 2018: Dunleavy officially becomes governor.

• Dec. 14, 2018: Ahead of a legal deadline, Dunleavy and his finance team release a revised budget that includes a $3,000 Permanent Fund dividend and lowers the expected oil price to $64 per barrel in the next fiscal year. Dunleavy and his cabinet have not had time to adjust Walker’s spending plan, so the result is a $1.6 billion deficit, which Office of Management and Budget director Donna Arduin says is a “starting point.”

• Jan. 15, 2019: The 31st Alaska Legislature convenes. The Alaska House of Representatives is unable to elect a Speaker and enters the new session in deadlock.

• Feb. 13, 2019: Dunleavy introduces a revised state operating budget that includes sweeping cuts to state services and plans to divert revenue from municipalities to the state. At the time, the Office of Management and Budget says the cuts amount to $1.8 billion; the nonpartisan Legislative Finance Division says later that month that the cuts are less than that but also call for diverting revenue from cities and boroughs to make up the difference. The oil forecast for the fiscal year that starts July 1 is $66 per barrel.

• Feb. 14, 2019: The House, galvanized by the governor’s proposal, elects Bryce Edgmon as speaker, ending the monthlong leadership deadlock. The coalition majority in charge of the House initially consists of 25 members: two independents, eight Republicans and 15 Democrats. Two Republicans later leave the coalition.

• April 11, 2019: The House approves a state operating budget that rejects most of Dunleavy’s cuts.

• May 1, 2019: The Senate approves a modified version of the House’s operating budget that includes more cuts, but still less than those proposed by the governor.

• May 3, 2019: The House rejects the Senate’s changes. Three days later, the Senate declines to withdraw its changes. This causes the appointment of a conference committee to come up with a compromise budget.

• May 15, 2019: The first session of the 31st Alaska Legislature reaches its 121-day constitutional limit with the budget unfinished. The governor orders a special session to begin the next day.

• June 3, 2019: Dunleavy vows to veto a $1,600 Permanent Fund dividend if it passes the Alaska Senate.

• June 9-10, 2019: The Alaska Legislature approves a state operating budget that averts a July 1 government shutdown. The amount of this year’s Permanent Fund dividend is not included in the bill.

• June 12, 2019: The Alaska House approves the state capital budget, but Republican opposition leaves the bill mostly unfunded. House minority Republicans say they will not approve paying for the capital budget from the Constitutional Budget Reserve until the Legislature approves a $3,000 dividend.

• June 13, 2019: The first special session adjourns. Dunleavy issues a proclamation calling for a second special session to begin in Wasilla on July 8.

• June 28, 2019: Dunleavy announces more than $400 million in operating budget vetoes. Initially stated as $444 million in cuts, the Legislative Finance Division says July 23 that the governor vetoed $409 million from the operating budget and $11.7 million from the mental health budget. In addition, the governor withheld $30 million in K-12 education funding because of concerns about its constitutionality.

• July 1, 2019: The new fiscal year begins. The operating budget (including Dunleavy’s vetoes) comes into effect, as does the malformed capital budget. The Constitutional Budget Reserve sweep takes place, draining scholarship funds, the Power Cost Equalization endowment, and 52 other program-specific accounts.

• July 8, 2019: The second special session of the 31st Alaska Legislature convenes in Juneau. A group of Republican lawmakers attempts to convene the session in Wasilla but lacks enough support to do so.

• July 10, 2019: With 22 Republicans in Wasilla and absent from the state Capitol, the Alaska Legislature fails to override Dunleavy’s operating budget vetoes for lack of support.

• July 11, 2019: Dunleavy signs the unfinished capital budget into law, vetoing $10.8 million in projects. Because most of the budget is unfunded, his ability to veto is limited.

• July 16, 2019: The Alaska Legislature sues Dunleavy for failing to provide school funding on time, per legislation passed in 2018 and signed into law by then-Gov. Walker. The governor contends the legislation is unconstitutional and cannot be paid; the Legislature says it is constitutional and must be paid. Both sides agree to allow K-12 funding to continue while the lawsuit progresses.

• July 17, 2019: With legislators still split between Wasilla and Juneau, Dunleavy changes the proclaimed location of the special session to Juneau. He also amends the proclamation to include the capital budget, not just the dividend.

• July 20, 2019: The Alaska Senate approves Senate Bill 2002, funding the capital budget and fixing the reverse sweep.

• July 21, 2019: The Alaska House fails to approve funding the capital budget.

• July 22, 2019: The House again fails to approve funding the capital budget. The University of Alaska Board of Regents, in response to the operating budget vetoes, declares “financial exigency.”

• July 29, 2019: The Legislature approves House Bill 2001, which pays a $1,600 Permanent Fund dividend and reverses all but $23.29 million of the governor’s operating budget vetoes. HB 2001 itself may be vetoed all or in part. Separately, the Alaska House, in its third try, funds the capital budget with the state’s Constitutional Budget Reserve. The bill also includes the “reverse sweep.”

• Aug. 8, 2019: Dunleavy signs the legislation fixing the capital budget and reverse sweep but vetoes $34.7 million in projects.

• Aug. 12-16, 2019: In a series of announcements, Dunleavy says he will reverse himself on more than $140 million in vetoes from June. The reversals cover the University of Alaska, senior benefits, early education, Alaska Legal Services and two education programs.

• Aug. 19, 2019: Dunleavy signs House Bill 2001.