Senate passes budget, with full PFD

Juneau’s senator stood alone at the end of a long day of debates Wednesday, as he was the lone senator to vote against the body’s budget proposal.

Sen. Jesse Kiehl, D-Juneau, was the only detractor on a budget that preserved a full $3,000 Alaska Permanent Fund dividend. The proposal cut about $258 million of spending, according to the Senate Majority, which is more than what the House proposed and less than what Gov. Mike Dunleavy proposed in his budget.

On the floor, Sen. Bert Stedman (co-chair of the Senate Finance Committee) said that having a full PFD puts the Senate proposal more than $1 billion over budget. The budget now goes back to the House, which proposed a budget that allows for about a $1,200 PFD.

“When you’re 1.1 billion short on about $5 billion, the numbers just don’t work,” Kiehl said in an interview afterward. “It’ll be a different bill when it comes back. We’ll have something very different in front of us and we’ll evaluate that based on what’s really in it.”

Once the Legislature has its budget proposal together, it will go to Dunleavy, who has the ability to veto the budget.

The most anticipated vote of the day was on the amount of the permanent fund dividend. Sen. Chris Birch, R-Anchorage, proposed cutting the PFD from $3,000 to $1,200. He said issuing a smaller PFD this year will help set the fund up for a brighter future.

“This would put us on a more sustainable course,” Birch said on the floor.

That amendment was soundly defeated by a 17-3 margin. Kiehl was a “yes” vote, alongside Birch and Sen. Natasha von Imhof (the other co-chair of the Senate Finance Committee). Von Imhof, an Anchorage Republican, said prior to the overall budget vote that she was going to vote in favor of it but was tentative about some parts of it. Kiehl said on the floor and afterward that he felt the senators should have voted not on the budget that might come later, but at the budget proposal in front of them Wednesday.

The Senate Majority caucus stuck together on almost every vote Wednesday, rejecting more than a dozen attempts from Senate Minority members to change the Senate’s budget proposal. Other amendments voted down included more funding for the Alaska Marine Highway System to increase service in the winter, more Medicaid funding and more funding for prosecutors and courts.

A few small budget increases were accepted Wednesday, including $800,000 for the Senior Benefits Program.

Sen. Tom Begich, the Senate Majority leader, said in a statement after the vote that it was a difficult process to cut the budget and preserve funding for vulnerable citizens.

“This is a budget that no one loves,” Begich said, “but in this fiscal climate, we were able to prioritize basic public needs to keep our economy afloat and protect the most vulnerable Alaskans.”

In a press conference following the vote, von Imhof said negotiations with the House will start next week. There are just two weeks left until the 121st day of session — which the Alaska Constitution mandates must be the final day of session — but Stedman has been confident that the Legislature will finish its job on time.

He said this is a fairly normal timeline, and that despite the House taking a month to get organized, the Senate has not experienced a calendar delay yet. Two weeks, he said, is a long time in “political time,” and he’s confident the Legislature will have a balanced budget on Dunleavy’s desk by May 15.

“We’re not leaving town with a $1.2 billion hole,” Stedman said.

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• Contact reporter Alex McCarthy at amccarthy@juneauempire.com. Follow him on Twitter at @akmccarthy.

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