By: James Brooks, Alaska Beacon
Before they head into a long Easter weekend, members of the Alaska House’s finance committee are preparing to repack the latest draft of Alaska’s new operating budget.
On Wednesday and Thursday, members of the committee are scheduled to consider changes to a $10.4 billion document that will fund state services for the 12 months beginning July 1.
Included in the draft is a $175 million one-time funding boost for public schools and $1.1 billion for this year’s Permanent Fund dividend.
Right now, the draft budget has a surplus of $152 million, but “there are several things that have not been funded that will certainly reduce the surplus,” said Remond Henderson, aide to Rep. DeLena Johnson, R-Palmer and operating budget co-chair of the House Finance Committee.
Among the unfunded items listed by the Legislative Finance Division last week: The state ferry system is predicting a shortfall of up to $38 million. The Alaska Senate has passed a senior benefits bill at a cost of $23.5 million per year. A rural-school broadband bill passed by both House and Senate is expected to cost $40 million per year.
The state has millions of dollars’ worth of projects on its deferred maintenance lists and is negotiating with four employee unions. Inflation-driven pay increases are expected.
“That $152 million could disappear quite rapidly,” Henderson said.
The $1.1 billion allocated for the dividend, plus an energy rebate authorized last year and money diverted from an expected surplus in the current fiscal year, would result in a 2024 Permanent Fund dividend of $2,272.
Several members of the House Finance Committee have already voiced skepticism about that figure, saying the cost is more than the state can afford, given other priorities.
“I guess what I’m wondering is if this is passed by the House, and the public believes they’re getting a $2,272 dividend, is that realistic?” asked Rep. Andy Josephson, D-Anchorage, on Friday.
The question was directed at Henderson, who responded that any of the proposed additions are still just hypotheticals.
“All of those things are potential adds to the budget,” Henderson said. “But you’re absolutely correct that those things, if they did occur, would reduce the amount of the Permanent Fund dividend.”
Johnson said to expect that amendments will change the draft this week. Further amendments are expected when the full House votes on the budget after the Easter holiday.
“Certainly there will be changes,” Johnson said on Friday. “If this budget didn’t get changed, I think it’d be the first time in state history that we passed the House operating budget unchanged.”
