Alaska Legislature passes budget with $1,300 PFD and boost to school funding

The Alaska Legislature struck a budget deal Thursday, the first day of the special session, that includes a $174 million boost to public school funding and pays a $1,300 Permanent Fund dividend. 

The budget deal came after failure on the last day of the regular session when the House members adjourned before even voting on the Senate’s budget. 

Senate leaders said they negotiated with the House late Wednesday night and throughout the day Thursday. The deal ultimately contained $34 million of added money for several local projects for members of the House. 

Senate President Gary Stevens, a Kodiak Republican, said finally getting a list of capital budget requests from the House Majority helped seal the deal. 

“We worked off of their list, and that’s the majority of projects that were in that budget,” he said. 

The budget has money for a new roof for the Palmer Library, $2 million for fixing the Mary Avenue storm drainage system in Anchorage and harbor float replacements in Dillingham, among other items. 

It also contained $7.5 million for child care grants and the same amount for a new program to fund local medical care options. 

“It’s a good day for Alaska,” said House Rules Chair Craig Johnson, R-Anchorage. “Our communities will be taken care of. They’ll have public safety, fire protection, they’ll have road graders this winter.” 

With energy in the final weeks focused on the budget, the Legislature adjourned without passing several high-profile bills, including one to reform involuntary commitment laws for mentally incapacitated people and a program to pump greenhouse gasses back into the ground. 

Stevens said the Legislature learned some lessons so that it can be more productive in future sessions. 

“The lesson is: follow the schedule,” said Stevens. “We all know there’s a schedule, we all know, there’s a time at which you cannot go to a conference committee, we just all need to pay attention to that.”

House majority leaders had a similar take. Johnson said his caucus would be more prepared with demands next year. 

“We’ve kind of coined the phrase that the only thing we could change is us,” he said. “So we’ve got to get better.”

Throughout the last weeks of the regular, 121-day session, the House and Senate remained divided over the size of the PFD, which has been the source of budget fights since 2017. The House proposed a $2,700 dividend — more than double the $1,300 ultimately passed — but House leaders couldn’t muster the votes to dip into savings to pay for it. The final budget included a provision to pay an additional $500 if oil prices are above predictions. 

“Would we have liked it to be higher? Well, absolutely,” said Rep. DeLena Johnson, a Republican from Palmer. “But you know, you can sometimes only get to meet in the middle.”

The budget bill passed the Senate 15-1 and the House 26-14. All members of the House Minority voted in favor of the bill, while the Republican-dominated Majority split. Majority Leader Cathy Tilton, R-Wasilla, voted against the bill. 

It was the first time since 1982 that the budget passed through concurrence instead of through a conference committee between both chambers. 

It now goes to the governor who can still veto the bill. Gov. Mike Dunleavy is currently on a charity bear hunting trip, a spokesperson said. He hasn’t publicly commented on the budget. The budget year starts July 1. 

The governor is expected to call a special session in October that would include discussions of new taxes.

Correction: This story previously misstated the district DeLena Johnson represents.