Lawmakers have been hinting at “alternative sources” to close the state’s budget gap as House Democrats continue to hold the key to accessing Alaska’s Constitutional Budget Reserve. But moves may be afoot which would enable Republicans to access the CBR, or other state funds, without the support of the minority.
House Speaker Mike Chenault…
Speaker Chenault(R-Nikiski): “Nobody wants to lay off all the State employees, nobody wants to go down that path, but it’s a matter of being able to put the pieces together that allow us the funds to be able to pay for the 2016 budget.”
One alternative may be to tap Alaska’s earning reserve fund, which is connected to the annual Permanent Fund Dividend. While the fund’s Chief Financial Officer Valerie Mertz says withdrawals could be made without immediately impacting PFDs, any potential threat, or possible impact to future PFDs is recognized as politically dangerous, especially with dividends due to be paid just weeks before the next election.
A portion of the Permanent Fund’s annual earnings is set aside to pay Alaskans’ annual checks, but the rest is kept in reserve to combat inflation and help pay for government.
Kenai Peninsula Senator Peter Micciche said he’s still hoping to be able to fund fundamental items the Governor took out of the budget, though he didn’t specify how that would be done…
Sen. Micciche (R-K Pen.): “So what we’ll do is take those items he red-lined, put it into his new supplemental budget, if you will, pass that with a funding mechanism, and then pass that onto the House. I would like to see this reach a conclusion by the end of the week, but I’ve been wanting to see that for several weeks now. It may take longer than that.”
Access to the earnings reserve fund requires a simple majority in the Legislature, which Republicans could manage without the support of the minority. The majority may use their access to the fund to make transfers which would essentially give them a way to tap the CBR through the back door.