Budget committee proposes up to $3,850 in payments to Alaskans after dramatic negotiations

JUNEAU — A budget committee has presented a spending plan that could include up to $3,850 in payments to Alaskans, ending tense negotiations that began after the House rejected a Senate plan to send $5,500 to residents.

Conference committee members charged with crafting an acceptable budget for both the House and Senate held negotiations that lasted until Monday night and resumed Tuesday morning to reach the budget compromise, while committee members they thwarted efforts to slow their progress by blocking doors and moving quickly to reach an agreement before time runs out.

The committee’s spending plan finally became official during a Tuesday afternoon meeting, less than 36 hours before the Wednesday midnight deadline by which the session is due to end. If they don’t agree on a spending plan by then, they may be forced into a special session.

With the deadline approaching, the committee meeting was not without a good dose of drama. Midway through the process, committee chairman Senator Bert Stedman, R-Sitka, instructed staff member Pete Ecklund to barricade the door, trapping all six committee members — plus staff, journalists and others — in the room. The barricade remained in place for several minutes as the committee members continued their work.

The instruction came from Stedman after Representative Kevin McCabe, R-Big Lake, made an appeal to the House, which would have forced House committee members to return to the House floor and slowed the committee’s work.

“We don’t have time to stop and waste an hour or two, or we won’t have a budget on time,” Stedman said after the committee meeting ended.

It was not the first time that Stedman has resorted to barricading committee members to ensure his work is completed by Tuesday. Earlier in the day, Senator Natasha von Imhof, R-Anchorage, made a call to the Senate as committee members held closed-door negotiations. According to committee member Senator Bill Wielechowski, D-Anchorage, Stedman barricaded a door to prevent the sergeant-at-arms from entering the room and interrupting their discussions.

“If the whole thing dies, we need to start all over again and we don’t want to risk that,” said Wielechowski.

When security arrived with the sergeant-at-arms, they broke down the door. Committee members ended their discussion with security officers waiting to escort Senate members to the floor.

Stedman said the main challenge for the committee was reaching agreement on the amount of dividends. Under their proposal, the budget would include a $2,550 dividend from the Permanent Fund—half of the 5% drawdown of the Permanent Fund’s total value that legislators, under a grant-like management plan, have earmarked for spending. That’s double what the House proposed in the budget it passed last month, but far less than the $4,200 statutory dividend advanced by the Senate last week.

In addition, the budget includes $1,300 in energy relief payments. But under the committee’s plan, half of that money — about $420 million — would have to come from the state’s Constitutional Budget Reserve. Access to this savings account requires three-quarters of a vote from each body, meaning 30 members of the House and 15 members of the Senate must vote in favor of the spending. If that vote fails, Alaskans will only receive $650 in energy relief checks.

The plan drawn up by the committee would leave about $750 million for future funding of K-12 education. It would also put about $800 million in the Reverse Statutory Budget account by the end of the next fiscal year, if oil prices remain close to the Department of Revenue’s latest projection of $100 a barrel.

The House and Senate are due to hold final budget votes on Wednesday.

Lawmakers said on Tuesday they hope the budget will pass. And while the amount of the dividend is less than the $5,500 amount proposed by the Senate, the amount proposed by the conference committee would be the largest dividend in the history of the Permanent Fund.

But without a lasting solution to the Permanent Fund’s dividend calculations, some have warned that similar budget negotiations will remain a fixture in the legislative process.

“Unfortunately, what’s going to continue to happen unless we have the dividend in the Constitution is that you’re going to see a ping pong, up and down, depending on who’s in power and who has the votes,” Wielechowski said. “In an issue like this, it has to be something people can trust, something consistent.”

As budget negotiations continued, the House and Senate held morning-evening sessions on Tuesday in which they considered key pieces of legislation, waiving and skirting rules in an effort to pass bills ahead of Wednesday’s deadline. .

Among those bills was the Alaska Reads Act, which was attached to another bill during a Senate session in a move to bypass the House committee process. The measure, which would establish reading programs and early childhood education funding, stalled last week at the House Education Committee, where House Majority Representative Tiffany Zulkosky, D-Bethel, a House majority member, joined minority members in voting against . Zulkosky said she would unfairly treat Alaska Natives and students for whom English is a second language. By adding the bill as an amendment to an existing House bill and voting to pass it, the Senate has ensured that it will be sent directly to the House floor.

“This bill is too important for one person” to block it, said Senate Minority Leader Tom Begich, D-Anchorage. He added that Governor Mike Dunleavy told him he would support other education funds in the budget if the bill passes.

Dunleavy, a Republican, has remained silent as the legislature approaches its budget deadline. On Tuesday, a spokesperson for the governor declined to say whether Dunleavy would support the budget advanced by the conference committee if it passed the Legislature.

Dunleavy, who has the power to veto all or parts of the budget, previously said he wanted a dividend of at least $3,700 this year.

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