JUNEAU — A vote Wednesday evening in the Alaska House of Representatives may reduce an expected increase in local property taxes statewide.
In a 22-15 decision, the House restored half the funding of a state program that reimburses local school districts for a portion of the bond debt they have incurred while building or renovating school buildings. The program has been suspended for new bonds since 2015, but districts across the state already have hundreds of millions of dollars in debt on the books.
If the state were to stop making payments on that debt, local governments have warned that they would have no choice but to slash schools spending or ask local residents to make up the gap. In most communities, that would mean increases to property taxes.
With Wednesday night’s vote, the House agreed to pay $70 million of the $140 million cost of the program. That partially reverses a decision made by the House Finance Committee to completely eliminate funding.
The vote isn’t the last word: The House’s draft budget is still early in the legislative process and must pass muster with the Alaska Senate and Gov. Mike Dunleavy before it becomes law.
The House operating budget includes $10.22 billion in spending, plus a Permanent Fund dividend estimated to be about $1,300-$1,400 per person. (Precise figures are not yet available.) That’s a smaller dividend and more spending than the proposal offered by the governor in February. Both the governor’s proposal and the House’s concept eliminate the state’s deficit without additional spending from state savings accounts.
Since Tuesday, lawmakers in the House have been debating amendments to the House budget, and the bond-debt funding is the most financially significant amendment approved thus far. Before breaking for dinner Wednesday, lawmakers voted to increase their own budget to prepare for possible special sessions later this year.
After returning, they turned to the bond-debt proposal and voted to restore funding for the state’s dairy inspection program. That restoration, suggested by DeLena Johnson, R-Palmer, came after warnings that eliminating the program — as proposed by the governor — would force the state’s lone operating dairy to shut down and prevent other dairies from opening.
About 20 amendments remain to be considered, but it was not immediately clear Wednesday night whether the House will take up those amendments when it returns to work at 10 a.m. Thursday morning.
Lawmakers could instead skip consideration of those items and advance to final debate before voting to send their budget proposal to the Senate. That vote is not particularly in doubt — members of the 25-member coalition House majority are in a binding caucus that requires them to vote for the budget.