By: James Brooks, Alaska Beacon
The Alaska Legislature is preparing to re-vote on a key spending bill that will cover millions of dollars in disaster response and construction projects in the current fiscal year.
On Monday, a bicameral conference committee voted 5-1 to send an amended version of the bill to final votes in the House and Senate. Those votes may take place Wednesday.
The state’s fast-track supplemental budget contains $449.3 million in spending — expenses accrued since legislators and Gov. Mike Dunleavy adopted the state budget last year.
Legislators are separately working on a budget for the next fiscal year, which begins July 1. A vote on that is expected at the end of the legislative session in May.
The supplemental budget bill includes $70.2 million to unlock grant-funded construction projects principally paid for by the federal government — a major lobbying priority for the state’s construction industry.
It also includes tens of millions for the state response to last year’s wildfire season and millions more as a down payment for the state’s response to ex-Typhoon Halong, which devastated Western Alaska last fall.
The new spending would largely be paid for with new revenue the state expects because of higher oil prices caused by the Iran war.
As long as prices remain high through June 30, the end of the fiscal year, legislators expect there will be enough general-purpose money to cover the expenses, plus a smaller package of budget amendments already proposed by Dunleavy.
Those amendments arrived too late to be added to the supplemental bill.
If oil prices don’t match expectations, the bill contains language that would allow the state to use the Constitutional Budget Reserve, the state’s principal savings account, to cover the difference plus $20 million in “headroom.”
That clause may run into problems in the House, where the 19-person House Republican minority caucus has voted several times against spending from the reserve.
It takes 30 votes in the House and 15 in the Senate to spend from the reserve; while the Senate has met that threshold and is expected to do so again this week, it isn’t clear whether the House will do so.
The 21-person, predominantly Democratic coalition that controls the House would need to attract at least nine minority votes, and in earlier votes, it was unable to do so — something that forced the bill into a bicameral conference committee for further negotiations.
Rep. Will Stapp, R-Fairbanks and the minority’s negotiator on the conference committee, was the only lawmaker to vote against the revised bill on Monday, saying he doesn’t believe any kind of spending from the reserve is necessary at this point.
Members of the House majority have argued that allowing reserve spending — if necessary — would provide surety for construction businesses making summer plans.
They have also argued that time is of the essence: Delaying action on the bill would mean those companies might have to defer purchasing and hiring decisions ahead of the summer construction season.
Members of the House minority argued that as previously written, the bill would have allowed members of the majority to direct the spending of hundreds of millions from the reserve, even if it wasn’t needed to balance the supplemental budget.
That version was cut to less than $375 million in spending, an attempt to attract minority votes, but while that approach worked in the Senate, it did not succeed in the House.
When the House failed to pass the reserve vote, lawmakers there sent the bill to the conference committee for further work.
While that committee was able to finalize a draft compromise, it won’t be clear until later whether that compromise can pass out of the Legislature.
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