Alaska Senate approves fast-track budget bill to cover disasters, transportation projects
- Alaska Beacon
- 1 hour ago
- 4 min read
House lawmakers are scheduled to vote on the proposal at 2:30 p.m. Thursday, with big spending from savings possible
By James Brooks
Alaska Beacon
The Alaska Senate voted unanimously Wednesday to spend more than $300 million from savings and reverse some of Gov. Mike Dunleavy’s most recent budget vetoes.
In a pair of 20-0 votes, the Senate approved a bill that would spend $373.5 million from the Constitutional Budget Reserve to pay for a variety of expenses and fill a deficit in the current budget year.
“This is money to fund the budget that was passed last year for things that the governor already spent on,” said Sen. Bill Wielechowski, D-Anchorage.
The bill now goes to the House, which failed last month to approve the needed spending from the budget reserve.
Among the expenses in the new supplemental budget bill is $70.2 million needed to unlock federal transportation grants. Dunleavy vetoed that funding last year amid a dispute with the Legislature about the proper source of the money.
Also in the bill is $98.7 million for the state’s wildfire response fund and up to $75 million for the disaster relief fund. That latter figure is dependent upon negotiations with the federal government about who will pay for the response after ex-Typhoon Halong devastated southwest Alaska last year.
The largest single item in the bill is $129.6 million needed to refill the state’s higher education investment fund, which was used to cover expenses due to a separate veto-involved dispute between the Legislature and governor.
That fund covers scholarships paid to Alaska high school students who meet academic standards and attend in-state schools.
The Senate-passed bill is significantly smaller than a $531 million version that had been previously considered. It shrank at the urging of the Senate’s six-person, all-Republican minority caucus.
It takes three-quarters of the House and three-quarters of the Senate — 30 Representatives and 15 senators, respectively — to spend from the budget reserve.
That’s a high hurdle, particularly because the Senate’s bipartisan majority caucus has just 14 members and the House’s multipartisan majority has just 21 members.
In both cases, compromises with the all-Republican House and Senate majorities are needed to spend from the reserve.
On Monday, the Senate pulled the supplemental budget bill from its schedule with no advance notice. Sen. Lyman Hoffman, D-Bethel, said at the time that the Senate Majority had unexpectedly lost a minority vote it needed to spend from the reserve.
That spurred hours of closed-doors negotiations between the Senate minority and members of the majority.
Since the United States and Israel started bombing Iran on Feb. 28, the price of oil — and, in turn, Alaska’s potential oil revenue — has risen, giving legislators another way to erase a looming deficit.
“We went over and talked with (the Senate Finance Committee) co-chairs and just said, ‘Hey, obviously, the price of oil is changing,’” said Senate Minority Leader Mike Cronk, R-Tok.
At the minority’s urging, the co-chairs removed almost $150 million from the bill — extra spending for state prisons, money for Medicaid, and millions in backup “headroom” for unforeseen expenses, among other items.
Cronk said the items removed during the compromise discussions could come back later, in the state’s regular budget bill, and the goal was to create “a real supplemental fast track” bill.
According to figures provided by staff for Hoffman, if Alaska North Slope oil prices average roughly $75 per barrel between now and June 30, the end of the state’s fiscal year, the state will earn enough oil revenue to pay for the removed items without spending from savings.
Since the start of the legislative session, construction companies have been lobbying for quick passage of a supplemental budget bill because they fear losing hundreds of millions of dollars’ worth of federally funded construction projects scheduled to take place as soon as this summer.
The Alaska Department of Transportation and Public Facilities has disputed the need for early funding, and on Wednesday, Sen. George Rauscher, R-Sutton, attempted to strike that item from the supplemental budget.
He withdrew his proposed amendment after encountering opposition, saying he was satisfied with the smaller bill on the floor.
“We’ve come down a long way from $500 million,” he said.
After the Senate voted on Wednesday morning, members of the House majority attempted to call a vote to confirm the Senate’s changes.
Members of the House minority objected, and the vote is now scheduled later, at 2:30 p.m. Thursday.
House Minority Leader DeLena Johnson, R-Palmer, said members of the minority wanted to wait until Friday, when a new state revenue forecast is expected.
“We’re talking about a $300 million draw. We may not need to take that full amount out of savings when we have money coming in,” she said, referring to the way the price of oil has surged during the Iran war.
Asked whether the new, lower draw from the reserve is more acceptable to members of the minority, Johnson said she wasn’t sure yet.
“There’s probably a number that’s better than others, but I mean, as low as possible is our number,” she said.
• James Brooks Cascade is a longtime Alaska reporter who lives in Juneau. He previously worked at the Anchorage Daily News, Juneau Empire, Kodiak Mirror and Fairbanks Daily News-Miner. Alaska Beacon is part of States Newsroom, the nation’s largest state-focused nonprofit news organization.
