Alaska Legislature

Alaska House breaks budget logjam, sends spending plan to Senate

JUNEAU — The Alaska House passed its annual state spending plan Monday, in a 21-19 vote that put an end to two weeks of budget-induced paralysis.

But while Monday's action allows the budget to move forward, it also underscores the obstacles lawmakers still must negotiate before they can pay for the plan, send it to the governor for his signature and return home to campaign for re-election.

The House plan that passed Monday was crafted by the largely Democratic majority.

[Related: What's the hold-up? The Alaska Legislature's latest stalemate, explained]

It would spend $5.5 billion in unrestricted general funds for state agency operations, paying off debts, Alaska's retirement system and an estimated $1,600 dividend for each Alaskan. The total budget, including federal and other cash, is $11.5 billion.

But the budget proposal heads to the Senate with a $700 million hole.

That's because the cash easily available to lawmakers by a majority vote — including oil revenue and $2.7 billion in investment earnings from the Alaska Permanent Fund — isn't enough to pay for the whole budget.


The missing $700 million, under the House's budget, is supposed to come from a savings account called the Constitutional Budget Reserve.

But the reserve requires a three-fourths majority — 30 votes in the 40-member House — to access. In a separate question Monday, just 21 House members voted to spend from that account.

Crossing the 30-vote threshold will require the 22-member House majority to get support from the 18-member Republican minority at some point later in the budget process. All 18 of those members all voted against the spending plan Monday; they argue it spends too much money.

Even with the $700 million gap, the budget now moves to the Senate, which is expected to unveil preliminary details of its own spending plan this week.

The mostly-Republican Senate majority is expected to propose a smaller dividend and some cuts to state agencies, in an effort to reduce the amount of cash needed from the Constitutional Budget Reserve.

The reserve is expected to hold roughly $2.5 billion at the end of the state's current fiscal year, in June.

The House's budget proposal would spend more than one-fourth of that balance in the next fiscal year. At $5.5 billion in unrestricted general funds, it's $400 million more than last year's proposal — largely because of a $250 million increase in the amount set aside for Permanent Fund dividends, which would rise to $1,600 from $1,100.

Once the Senate passes its own budget proposal, the two versions will have to be reconciled before going to Gov. Bill Walker for his signature or veto.

There are less than two weeks left before the Legislature's initial, 90-day deadline for finishing their session, which comes April 15.

Nathaniel Herz

Anchorage-based independent journalist Nathaniel Herz has been a reporter in Alaska for nearly a decade, with stints at the Anchorage Daily News and Alaska Public Media. Read his newsletter, Northern Journal, at