Alaska lawmakers debate bill to fund capital budget

Legislative Finance Director David Teal testifies before the Senate Finance Committee in 2017. On Friday, Teal said there would be a $102 million gap between how much the state is projected to spend and how much it’s projected to raise in revenue if the new capital budget bill were to become law without changes. (Photo by Skip Gray/360 North)

Alaska lawmakers are debating a new bill to fund the capital budget, introduced by Gov. Mike Dunleavy on Friday.

Senate Bill 2002 and House Bill 2002 would fund most of what the Alaska Legislature passed in the capital budget, but it wouldn’t fund some items, like money for harbor construction.

Legislators must find a source to fund the projects in the capital budget, since the original capital budget law didn’t include one.

Republicans in the House minority caucus killed an attempt to fund it from the Constitutional Budget Reserve. Drawing from that savings account requires three-quarters of both legislative chambers to approve. But the 15-member House minority wanted to fully fund permanent fund dividends before agreeing to draw from the CBR. And the House majority didn’t want to draw down state savings for the PFD.

Dunleavy added the capital budget to the agenda for the second special session on Wednesday.

But questions about how the bill would fund the projects remain. It depends on the general fund — the account usually used to pay for the budget. But David Teal, director of the nonpartisan Legislative Finance Division, said the numbers in the bill don’t add up — there’s a $102 million gap between projected revenue and expenses if the bill were to pass.

The Dunleavy administration said it could use the next year to do an accounting of the cost of programs.

That prompted a response from Anchorage Republican Sen. Natasha von Imhof, citing a specific item that could be affected by the approach.

Sen. Natasha Von Imhof, R-Anchorage, questions representatives from the Alaska Gasline Development Corporation during a Senate Finance meeting focusing on the corporation's budget on Tuesday, February 14, 2017, in Juneau, Alaska. (Photo by Rashah McChesney/Alaska's Energy Desk)
Sen. Natasha von Imhof, R-Anchorage. (Photo by Rashah McChesney/Alaska’s Energy Desk)

“You stated it’s an accounting exercise,” she said. “The (Alaska) Vaccine Assessment Fund is not an accounting exercise. It is an emergency response. And with a measles outbreak, the reasons why we’ve got millions of dollars in this fund that can be deployed immediately by the (Centers for Disease Control and Prevention) is to buy the vials of vaccine that we need.”

Von Imhof and other senators want more work to be done on how these items will be funded this year and in the future. Some lawmakers still want to address the issue of the so-called sweep. The sweep refers to funds that the Legislature usually votes to keep separate from the rest of the budget each year to pay for specific programs.

This year they couldn’t agree to do that, because that would have required the same three-quarters vote that failed in the House. In addition, the administration expanded the list of funds affected by the sweep to include those that pay for Power Cost Equalization and university scholarships and grants.

Lawmakers plan to work on the bill this weekend. Both legislators and administration officials want the capital budget to be passed soon to assure access to up to $1 billion in federal matching funds for transportation and other projects.

The other item on the special session agenda is a bill to fund permanent fund dividends. But lawmakers also have expressed an interest in again attempting to reverse at least some of the budget line items Dunleavy vetoed on June 28.

Andrew Kitchenman is the state government and politics reporter for Alaska Public Media and KTOO in Juneau. Reach him at

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