The state Senate Finance Committee released its first revision of the state’s operating budget Wednesday, including a $1,000 Permanent Fund dividend and a $150 energy relief check. It came about a week after the state House passed a budget with a $1,500 dividend.
The Senate Finance Committee’s version is $450 million smaller than the version that passed the House — in part because of a more conservative assumption about oil prices. The Senate’s budget assumes prices will average $73 a barrel from July through the following June. The House built its budget around the Department of Revenue’s spring forecast, which assumed prices would average $2 higher, $75 a barrel.
The Senate’s budget also leaves more room for capital projects around the state. The House’s operating budget left little to none without a deficit, which would require drawing from savings.
At $73 a barrel, the Senate plan would leave roughly $50 million in surplus after accounting for a $360 million capital budget. The Senate unanimously passed a $247 million capital budget on Tuesday, focused largely on school maintenance, leaving about $113 million for additions from the House.
Sen. Jesse Kiehl, a Juneau Democrat who serves on the Finance Committee, said in a brief interview Wednesday that he’d rather see more money go to Alaskans facing high energy costs and struggling to make ends meet. But he said the Senate committee’s budget proposal represents a compromise.
“It really makes clear we're determined to meet Alaska's needs and balance Alaska's budget on current revenues, and we're not going to dip into savings when revenues are high,” he said. “It doesn't have everything that I want to see in it, or everything that anybody wants to see in it, but there's only so many dollars.”
The Legislature’s chief fiscal analyst, Alexei Painter, told lawmakers Wednesday the proposed $150 energy relief check would be funded by a surplus in last year’s budget, but he said it’s not yet clear if the surplus would actually materialize. That means it’s not clear whether the state will truly have the money to provide the energy relief payment, he said.
“It’s going to depend on actual revenue,” he said.
The Senate’s budget does retain one major House addition to the operating budget, at least partially. As public schools across the state continue to face serious financial trouble, school districts could receive up to $100 million in one-time funding under the Senate’s plan, but only if oil prices remain high. If oil prices average roughly $91 for the remainder of the fiscal year, as forecast by the Department of Revenue, school districts would receive $84 million. Another $29 million would be set aside for schools to cover high energy prices.
The House’s version would provide roughly $148 million in one-time general-purpose school funding, which would not be linked to high oil prices.
The Senate’s draft budget omits a number of other priorities that passed the House, like $11 million in extra transportation funding for schools and $17 million to revive a dormant state-funded heating assistance program.
Sen. Mike Cronk, a Tok Republican and the Senate minority leader, said Wednesday afternoon that he’d like to see state spending trimmed back further.
“I've always been a staunch person of keeping the budget as low as possible and making sure we're not adding to programs that add to the budget all the time,” he said. “I think I'm going to be focusing on that.”
Proposed budget amendments are due Friday. Legislators have until mid-May to pass the budget, and it’s typically one of the last items passed before the end of the legislative session.
