State Operating Budget Approved By Senate; Includes $3,000 PFDEdited By MARY KAUFFMAN
May 01, 2019
The budget passed by the Senate today includes $4.3 billion in unrestricted general funds (UGF) for agency and statewide operations – a reduction of $258 million over last year – and $1.94 billion to pay each eligible Alaskan a Permanent Fund dividend of approximately $3,000.
Including a $3,000 dividend in the Senate’s version of the budget creates the possibility for a House and Senate conference committee to negotiate up to the full, statutory dividend amount. “This budget protects the Permanent Fund for future generations of Alaskans, grows the economy, and keeps Alaskans safe,” said Senator Bert Stedman (R-Sitka) co-chair of the Senate Finance Committee. “The nine-member Senate Finance Committee – representing diverse viewpoints across our vast state – produced a budget Alaskans can be proud of.” $18.4 billion of Alaska’s $64.5 billion Permanent Fund is currently in an earnings reserve account that can be spent by the Legislature with a simple majority vote. To protect these funds, the Senate’s budget moves $12 billion from the earnings reserve into the constitutionally protected corpus, which cannot be accessed without amending the state’s constitution. “Defending the Permanent Fund is a top priority for the Senate,” said Senator Natasha von Imhof (R-Anchorage) co-chair of the Senate Finance Committee. “This budget locks away $12 billion into the Permanent Fund’s principal, taking nearly one-fifth of the fund’s assets off the table. This historic transfer will force the Legislature to have a conversation about a sustainable dividend calculation moving forward.” The House's operating budget bill passed with a vote of 24-14 on April 11th and was sent to the Senate for consideration. The House did not address the permanent fund dividend in their operating budget referred to the Senate for consideration. The House approved a $4.3 billion of unrestricted general fund spending for Fiscal Year 2020, meaning there was a $200 million reduction compared to what will be spent in this fiscal year. The Senate operating budget passed today included a reduction of $258 million over last year and $1.94 billion to pay each eligible Alaskan a Permanent Fund dividend of approximately $3,000. House Bill 39 passed the Senate by a vote of 19 to 1 and is now on its way back to the Alaska House of Representatives for concurrence. Because changes were made in the Senate, a joint House-Senate conference committee will convene to sort out the differences before final passage from the Legislature. The Senate's $1.94 billion to pay each eligible Alaskan a Permanent Fund dividend of approximately $3,000 will be considered by the House. Once the operating budget is passed by the Legislature, Governor Michael Dunleavy then has 30 days to sign the bill or to make vetoes. The Senate’s budget affirms the FY20 forward-funding for K-12 education approved last year. In mid-April, the House operating budget protected K-12 education, with the base student allocation and per pupil transportation fully funded and forward funding for Fiscal Year 2021. Head Start, Early Childhood Education grants, and Best Beginnings were also fully funded, as was public broadcasting infrastructure. “This budget delivers solid results for Alaska families and businesses,” said Senate President Cathy Giessel (R-Anchorage). “I am immensely proud of the work of the Senate Finance Committee, particularly the two co-chairs.” Senator Tom Begich (D-Anchorage) wrote in a prepared statement, "Passing a bare bones budget that protects seniors, public education, and provides a statutory dividend was not an easy process. But the Senate Democrats were committed to working together with the Senate Majority to craft a budget that works for Alaska. This is a budget that no one loves, but in this fiscal climate, we were able to prioritize basic public needs to keep our economy afloat and protect the most vulnerable Alaskans. With that in mind, I'm encouraging this legislature to look at opportunities during the interim to bring in new revenues to the state so we can build an Alaska we all want to be a part of, and one that future generations can rely on." Over 70 school board members and superintendents representing nearly two-thirds of Alaska's school districts recently met in Juneau for the Association of Alaska School Boards' annual Spring Fly-In in early April. For four intensive days attendees heard presentations from key legislators and state officials, received updates on current education issues, and developed strategies in preparation for meeting with lawmakers and providing committee testimony. Representative Dan Ortiz (I) Ketchikan, provided his take on the legislative session for the Association of Alaska School Boards during the Spring Fly-In. According to the recently released April 2019 AASB Commentary: "It's the PFD versus state services," Ortiz said. "Legislators understand that some consider the PFD essential. As we hear from around the state about the importance of programs and services, it just means less of a PFD," said Ortiz. "Everyone recognizes the value of a full PFD, but because of that we have a $1.6 Billion deficit. We could pay a $900 PFD and have a balanced budget. In 8 out of 10 public comments, people said give me a smaller PFD so we can still have services," Ortiz said.
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