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Alaska Legislature

Alaska House approves capital budget, but not money to pay for it

  • Author: James Brooks
  • Updated: June 12, 2019
  • Published June 12, 2019

JUNEAU — The Alaska House of Representatives approved the state’s $1.4 billion capital construction and renovation budget Wednesday but failed to approve money to pay for it.

Alaska state representatives listen as Rep. DeLena Johnson, R-Palmer, speaks in favor of a capital budget amendment that would have paid a $3,000 Permanent Fund dividend. The amendment failed 15-21. (James Brooks / ADN)

As lawmakers prepare to adjourn the ongoing special session, the action leaves several hundred million dollars’ worth of programs unfunded in both the capital budget and the state operating budget. It is not clear what will happen to those programs when the state’s fiscal year begins July 1.

Among the affected items is nearly $1 billion in federally funded road construction. The federal government provides most of the money for road construction and maintenance projects in Alaska, but in order to receive that federal aid, the state must pay part of the cost.

The capital budget approved Wednesday night by the House would have paid that cost (and much of the rest of the capital budget) with money from the state’s Constitutional Budget Reserve, but spending from that account requires approval from at least 30 of the House’s 40 members, and the House only mustered 23 votes to spend from the reserve.

The 15-member Republican House minority said Tuesday that it would not agree to spend from the budget reserve unless the House and Senate approved a $3,000 Permanent Fund dividend using the traditional formula in state law. That proposal failed earlier in the day.

The minority attempted to avoid some of the consequences of that failure by suggesting that the budget should not be funded with money from the budget reserve, but the majority voted down several amendments along those lines.

Rep. David Eastman, R-Wasilla, pointed out that the Alaska Constitution requires that any withdrawals from the budget reserve be repaid. The Legislature’s actions Wednesday amount to “sending additional IOUs,” he said.

Members of the majority have previously said that one of the guiding principles of their 24-member group is that the state should not use money from savings to balance the budget or pay dividends.

Rep. Jennifer Johnston, R-Anchorage and vice chairwoman of the House Finance Committee, said after Wednesday’s vote that that principle applied only “for the operating budget that went out of the House.”

“We knew that at the end of the day, we need to have compromise with the (Senate),” she said.

Rep. Tammie Wilson, R-North Pole and co-chairwoman of the House Finance Committee, said the budget reserve money is being used to preserve more cash for this year’s Permanent Fund dividend.

Wednesday’s vote sends the capital budget back to the Senate for consideration. The Senate is expected to meet Thursday morning to confirm or reject the House’s actions.

Among the items in the capital budget is $10 million for new drug treatment facilities, $2.5 million for new earthquake sensors, $4 million for a road in the Northwest Arctic Borough and money to implement the new tough-on-crime legislation passed by the Legislature earlier this special session.

An early version of the capital budget would have allowed the state to send prison inmates to facilities Outside; that language was removed in an amendment Wednesday.