Alaska House approves state budget, Legislature adjourns special session after one day The new budget avoids a government shutdown and will pay a Permanent Fund dividend of about $1,300 per recipient this year

Last week, the Alaska Legislature has adjourned for the spring after approving a $6.2 billion state budget less than 24 hours into a special session called by Gov. Mike Dunleavy.

Legislators failed to finish the budget during the state’s 121-day regular session, but after an all-day session of negotiations behind closed doors, the leaders of the House of Representatives and Senate agreed to add more than $34 million in projects to a Senate-drafted omnibus budget bill.

The House hurried to adopt the result, voting 26-14 late Thursday to approve the bill and fund state services for 12 months beginning July 1. (Editor’s note: Rep. Neal Foster cast a nay vote). The Senate approved the budget 17-3 on Wednesday and by a similarly large margin on Thursday, but with four members excused absent.

Included in the budget — which totals about $14.4 billion if feefunded and federally funded projects are included — is a 2023 Permanent Fund dividend of about $1,300 per recipient, a one-time increase of about $680 to the state’s per-student public school funding formula, and money for construction and renovation projects across the state.

“We wound up with a moderate dividend and a lot of money to education … and with a balanced budget. I mean, what more can you ask out of life?” said Senate President Gary Stevens, R-Kodiak.

It’s the first time since 1982 that the House has concurred with the Senate budget, negating the need for a special committee to write a compromise between different budget versions adopted by the House and Senate.

Only 10 members of the House’s predominantly Republican majority coalition voted in favor of the budget; the other votes came from the 16-person, predominantly Democratic, House minority. Unaffiliated Republican Rep. David Eastman of Wasilla also voted against the budget.

Rep. DeLena Johnson, R-Palmer and a member of the majority who voted “yes,” said she wasn’t happy with the budget but was worried about the consequences of further disagreement.

“What I didn’t want to see was a government shutdown, and I didn’t want to bring it down to the brink,” she said.

Alaska lawmakers are required to approve a state budget each spring to cover spending for the fiscal year that starts July 1. If the state has no budget by then, many state services would shut down.

Rep. Craig Johnson, R-Anchorage and another majority “yes” vote, said he was trying to be pragmatic. Thursday was the first day of a 30-day special session, and Johnson said he didn’t believe that 29 more days of negotiations would result in a better deal.

“I came to the conclusion that in 30 days, we’ll be right here — at a cost of how much — and I would prefer not to vote for it, but when I weigh the shutdown, the cost, and the practicality, I’m a pragmatist. I’ll fight for what I believe in. But at the end of the day, I think this is the best we can get,” he said.

Some members of the House majority objected to Thursday’s late amendment, which was adopted after some procedural maneuvering and appeared to offer members of the majority reasons to vote for the budget.

That’s unusual, said Sen. Bert Stedman, R-Sitka and the person in charge of the Senate’s version of the operating budget. Usually, amendments are added to encourage minority lawmakers to vote for a budget bill.

“I can’t recall a time when budget amendments … were slanted in favor of the majority to try to get votes,” Stedman said. “It’s bizarre, frankly.”

Among the items added late Thursday were $3 million to help Fairbanks tear down the derelict Polaris Hotel; $5 million to rebuild the Palmer Public Library after snow collapsed its roof; $5 million for a harbor float in Dillingham; $4.75 million for water and sewer projects in Talkeetna; and a series of road and maintenance projects across the state.

DeLena Johnson said it is “not true” to say that the projects bought the votes of House members, and Craig Johnson said the projects were the result of negotiations between House and Senate.

“It was give and take, and what I don’t want anyone to think is that additional money influenced my vote,” he said.

The district of Rep. Justin Ruffridge, R-Soldotna, received $600,000 for a road project, but he voted against the budget.

“I don’t like being bought, frankly. It’s kind of what that felt like,” Ruffridge said.

Rep. Julie Coulombe, R-Anchorage, and Rep. David Eastman, R-Wasilla, were the only two lawmakers to vote against both the budget and the normally uncontroversial state mental health budget, a separate bill.

“I guess I can’t concur with bullies and bribers,” Coulombe said.

On Tuesday, Coulombe published a column declaring that the Senate’s approach was “misplaced arrogance based on hubris within the Senate.”

Before Thursday, the Senate incorporated several budget amendments on subjects favored by members of the House minority.

Those included $7.5 million in childcare grants, money for public broadcasting, funding for tourism marketing and seafood marketing, and aid to home health care services, among others.

“I think a lot of that was due to our ability to create a working relationship with the Senate majority,” said Rep. Louise Stutes, R-Kodiak and a member of the minority.

Members of the House minority also said they liked that the Senate’s budget did not require spending from the Constitutional Budget Reserve, the state’s principal savings account.

The 2021 Permanent Fund dividend was $1,114; last year’s dividend was $2,622 plus a $662 energy relief payment added after oil prices spiked following the Russian invasion of Ukraine.

This year, the Alaska House’s version of the budget proposed a dividend of $2,700, but its $1.7 billion cost would have required taking a significant share of the CBR, which opponents said would be unsustainable.

Doing so requires three-quarters of the House and three-quarters of the Senate. The opposition of the House minority made that impractical, and the Senate majority consistently opposed the idea.

“It comes down to the overdraw of the CBR and … the big dividend. That’s what a lot of it was revolving around,” Stedman said of negotiations.

In the end, the issue of the dividend fell away as the Legislature entered the special session, and the final budget includes the Senate figure.

While lawmakers have adjourned for the spring, they expect to be back in Juneau before the end of the year. Gov. Dunleavy has indicated that he will convene a 30-day special session this autumn for legislators to consider legislation pertaining to a longterm plan to bring spending and revenue under state law into balance.

“There is an impending October special session,” Tilton said. “And I hope so, because a fiscal plan or upon components of a fiscal plan are some of the most important issues for our caucus. So we’re looking forward to that.”