The State Legislature passed a compromise budget deal, ensuring adequate funding for constitutionally mandated services, protecting billions in the Permanent Fund’s corpus, and providing relief to local communities and small businesses affected by the COVID-19 pandemic.
The budgets maintain a six-year trend of flat spending. House Bill 69 authorizes $4.5 billion in state unrestricted general funds for upcoming fiscal year 2022 operating expenses and $348 million for the capital budget, which leverages $1.8 billion in federal funds for roads, bridges, and other infrastructure.
For the second year in a row, legislators voted to transfer $4 billion from the Permanent Fund’s earnings reserve account to the fund’s constitutionally protected principal, which cannot be accessed without voter approval. The combined $8 billion transfer to the Permanent Fund’s principal represents 10 percent of the fund’s total value.
Republican Sen. Natasha von Imhof before the vote:
“It’s the dividend again and again. We are crippling our state and we are not moving forward. This budget has a $500 dividend or a $1,000 dividend, not to mention all the other federal money that as people received this year. There has been a lot of cash going out to people this year. This is the year that we should focus on reinvigorating our economy through year round jobs that provide competitive wages that support families well into the future. The greed and the entitlement is astounding to me. I just don’t fathom it. My father is at home dying of cancer and I am here listening to the biggest crock of crap I’ve ever heard. I’m so sick of it. Get a grip people. Vote for this budget or no state trooper, no one will answer the phone.”
In the bill, funding for student scholarships, construction projects, and half the Permanent Fund dividend draws from the Constitutional Budget Reserve Fund (CBR), which requires a supermajority three-quarter vote from the House and Senate to access. With neither house able to achieve that threshold, half the funding for Permanent Fund dividends – $739 million – is inaccessible, reducing the $1,100 PFD down to $525.
The $1,100 PFD represents a compromise between the two houses and among ideologically divided members. With dividends traditionally paid out in October, lawmakers still have time to reconvene and reach a compromise.
Senate President Peter Micciche:
“I can assure Alaskans that this is not the end. As we return to our districts and continue the discussion with Alaskans over our collective future, I remain optimistic that the Legislature will unite around a 50-50 PFD, a long-term, sustainable fiscal plan, and pay the remainder of the 50-50 dividend this year. Without a permanent solution to the dividend, we will find ourselves in this situation year after year – allowing the dark cloud of uncertainty to linger over our state’s economy and diverting us from addressing the many social ills plaguing our state.”
The bill is now on its way to Governor Mike Dunleavy’s desk to be signed into law.
Transcribed audio courtesy of KTOO 360 TV.
