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Alaska Legislature

Meet the ‘reverse sweep,’ the Alaska Legislature’s next big obstacle

  • Author: James Brooks
  • Updated: 5 days ago
  • Published 5 days ago

JUNEAU — The possible failure of an obscure procedural vote in the Alaska Legislature may mean an end to dozens of state savings accounts that pay for things as wide-ranging as the state ferry system and building inspections.

It’s called the reverse sweep, and it requires a three-quarters vote of the Alaska Senate and the Alaska House. This year, that vote is needed as part of the capital budget.

With the House majority and minority at loggerheads, getting three-quarters support may be a problem.

In 1990, Alaska voters approved a constitutional amendment creating the Constitutional Budget Reserve. Part of that amendment requires the Legislature to repay the reserve if it’s used. The amendment says that until the reserve is fully repaid, “the amount of money in the general fund available for appropriation at the end of each succeeding fiscal year shall be deposited in the budget reserve fund.”

The state has dozens of special savings accounts for specific projects, such as for replacing state ferries, compensating crime victims, cleaning oil spills and reducing juvenile smoking. Because the state constitution prohibits dedicated savings accounts, all those savings accounts are “available for appropriation” under the language of the constitutional amendment, which means those funds should be dumped into the budget reserve each year.

With the reverse sweep in effect, it’s as though that transfer never happened.

As David Teal, director of the nonpartisan Legislative Finance Division, explained, it’s as if the funds from those accounts are swept into the Constitutional Budget Reserve at 11:59 p.m. June 30, the end of the state fiscal year. Then at 12:01 a.m. July 1, the reverse sweep kicks in, and the money flows right back out to where it came from.

Without the vote on the reverse sweep, however, that money doesn’t flow back out — which is a problem, because those funds are being used to pay for programs.

“If the capital budget doesn’t pass with a three-quarter vote, there could be up to $323 million in holes all over the budget,” said Sen. Natasha von Imhof, R-Anchorage.

In addition, state budgeters are revising the list of savings accounts subject to the reverse sweep, which may further broaden the effects of a failed vote to such things as the Power Cost Equalization Fund, which subsidizes rural power costs.

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