Capital budget revote falls one vote shy in the Alaska House of Representatives

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ANCHORAGE (KTUU) - The Alaska House of Representatives has again failed to fund the capital budget that is used to pay for construction projects across Alaska.

The $176.3 million capital budget would be funded from the $2 billion Constitutional Budget Reserve, the state’s main savings account. A three-quarters vote of both chambers is required to spend from the CBR.

The House voted Monday morning 29-7 with four members excused, falling one vote shy of the 30 votes needed to fund the legislation.

After the vote, the House majority sent a press release saying that the House could rescind its action and vote again on the bill before the end of July.

Senate Bill 2002 funds construction projects across Alaska and unfunded legislation passed in 2019, including the tough-on-crime bill signed by Gov. Mike Dunleavy.

Seven members of the House minority voted against funding the legislation. Rep. David Eastman, R-Wasilla, explained he would be voting no because of Section 17.

The language of the section allows for legislation passed during the first and second special sessions to be funded from the CBR if there are insufficient general fund dollars.

Rep. Tammie Wilson, R-North Pole, said she had never seen such "open ended" language in an appropriation bill. Democratic Rep. Neal Foster from Nome disagreed, referencing appropriation bills from the past four years that had the same language.

The purpose of the language, as described by the House majority, is to provide "head room" to fund legislation in case there is a shortfall. Foster said the bill would allow around $250 million of head room, far short of the $500 million in head room he could see in bills passed by previous legislatures.

As currently written, the capital budget uses $73 million dollars from the state to collect nearly $1 billion in federal matching dollars for road construction and airport maintenance projects. Lawmakers from across the aisle have said it’s essential for Alaska to capture those funds as the projects employ thousands of Alaskans.

"Alaska is a very large state, and it is important that we maximize transportation dollars each year so that we can connect our communities to jobs, to schools, to each other, and to our natural resources," said Sen. Natasha von Imhof, R-Anchorage on Saturday.

Senate President Cathy Giessel, R-Anchorage, said it was a priority for the Legislature to resolve that issue before moving onto debate over the size of the 2019 Permanent Fund dividend.

Legislators have referenced a July 31 deadline when the State of Alaska stands to lose those federal funds to other states.

SB 2002 also contains a “reverse sweep” provision that would refill dozens of state savings accounts set to be swept into the CBR in August and September.

The reverse sweep would refill the Power Cost Equalization fund (PCE) that helps rural Alaskans with their power bills and the Higher Education Investment fund that pays scholarships to Alaskan college students.

The Dunleavy administration had proposed keeping those accounts empty and drawing from the CBR to pay for the needs of programs in fiscal year 2020.

On Sunday, the Alaska House of Representatives first failed to reach a supermajority and fund the capital budget from the CBR. The House minority, with the exception of Rep. Kelly Merrick, R-Eagle River, voted no.

On Monday, Rep. Lance Pruitt, R-Anchorage, changed his no vote to support funding the bill. Anchorage Republican Reps. Laddie Shaw, Sara Rasmussen and Josh Revak also voted yes after being excused absent on Sunday.

Rep. Dave Talerico, R-Healy, a member of the House minority excused as absent on Monday, had told constituents that he sought a compromise deal on the capital budget and supported passing the reverse sweep.

The House minority had previously tied their support for spending from the CBR for the capital budget and passing a “reverse sweep” provision to delivering a full statutory Permanent Fund dividend.

The Alaska Senate passed the capital budget 19-0 on Saturday with Sen. Mike Shower, R-Wasilla, excused for work.

“This bill not passing is having immediate impacts, and Alaskans are understandably nervous and angry as they witness continuing gridlock in Juneau. Jobs, scholarships, and vital services are all on the line,” House Speaker Bryce Edgmon, I-Dillingham said in a prepared statement.

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