By Sentinel Staff
JUNEAU – A House-Senate conference committee on the state operating budget was to hold an organizational meeting today in preparation for negotiations to iron out differences in the budget bills passed by their respective chambers.
Appointment of a conference committee on the budget is an annual exercise, with three members of the House and three from the Senate authorized to negotiate a consensus on a spending plan.
The House approved HB 39, its version of the budget, by a 24-14 on April 11 and sent it to the Senate. The Senate made changes, approved on a 19-1 vote last Wednesday, and sent it back to the House, which rejected the Senate changes on a 37-1 vote Friday, setting the conference process in motion.
House Speaker Bryce Edgmon released the following statement after the vote:
“The Alaska House majority remains committed to developing a streamlined budget that protects core services and pays Alaskans a sustainable dividend. We look forward to working through the details of the budget in a conference committee with the Senate. Getting this critical task right is bigger than any one member of the Legislature.”
The Senate’s $11.5 billion budget calls for a $3,000 Permanent Fund dividend. The House’s $10.29 billion version does not list a Permanent Fund dividend appropriation, leaving that issue to be decided later.
Both of the state operating budget proposals call for spending cuts of around $200 million from last year, but far less than the $1.6 billion in the budget Gov. Mike Donleavy presented to the Legislature in February.
The Senate members of the conference committee are Senate Finance co-chairs Bert Stedman, R-Sitka and Natasha von Imhof, R-Anchorage, and committee member Donny Olson, D-Bethel. The House members are House Finance Committee co-chairs Neal Foster, D-Nome, and Tammie Wilson, R-North Pole, and committee member Cathy Tilton, R-Wasilla.
The Senate bill, in addition to the $3,000 PFD, calls for moving $12 billion from the Permanent Fund’s earnings account to the principal where it cannot be touched under the state’s constitution.
Both of the Senate Finance co-chairs, Stedman and Von Imhoff, supported a $1,200 dividend in an amendment that was rejected by the full Senate on a 3-17 vote. They stressed that the state can’t afford the $3,000 dividend, which would leave the Legislature to figure where to find another $1.2 billion to balance the budget.
That could include dipping into the constitutional budget reserve account or the Permanent Fund’s earnings account, the co-chairs said.
“Our savings for emergencies are at risk. Our credit rating is at risk,” Von Imhoff said in the final Senate debate on the budget bill.
Von Imhof said she was in favor of moving the budget through the legislative process despite her opposition to the dividend amount.
“When the hard-working people of Alaska are asked to pay an income tax only to see their hard earned cash deposited into the checking account of their neighbor,” she said. “I am not sure how long our state as we know it will last.”
The Senate Democratic minority proposed amendments to the Senate budget, ranging from restoring Medicaid payments and repealing oil tax credits to adding funds for Alaska Marine Highway System winter service, but they failed generally on party line votes.
The Senate did agree to add an extra $800,000 for senior benefits, in response to cuts last month by the state Department of Health and Social Services.
On Thursday, the Senate is expected to debate a bill that would restructure the formula used to determine the dividend.
Senate Bill 103, sponsored by the Senate Finance Committee, picks up where SB 26 left off last year. Under last year’s bill, later signed into law by Gov. Bill Walker, the Legislature takes a pre-determined draw from the Permanent Fund’s earnings.
Under SB 103, half would be spent on the dividend and the remaining half would be used for state services such as public safety and education.
If passed, the new formula would go into effect next year.
Von Imhof called it a “50-50 bill.”
On a related Permanent Fund issue, the House Finance Committee approved a bill by Rep. Jonathan Kreiss-Tomkins of Sitka, which calls for a public vote on a constitutional amendment that would transfer $8 billion from the Permanent Fund earnings reserve into the principal.
“This legislation protects an additional $8 billion for future generations of Alaskans while maintaining a reasonable cash balance in the earnings reserve account for PFSDs and public services,” Kreiss-Tomkins said in a statement.
