In a move that signals budget negotiations are failing, a bill was introduced Tuesday that would allow the Republican-led majority in the House to go around the Democrats to access the Constitutional Budget Reserve (CBR).

The Democratic coalition in the House is holding off on voting yes to using the CBR until some of their priorities, such as education and union contracts, are met.

“No one wants to reach the end of June and have to hand out pink slips,” said Republican Rep. Craig Johnson while explaining why HB 2002 is necessary to avoid a government shutdown come July 1.

Using money from the CBR is not being disputed, but how to access it is. Three quarters of legislators need to agree, which was achieved in the Senate but not the House. There is a way, however, for the House Majority to cut the Minority votes out of the equation.

“It’s based upon the amount of money we have to allocate or appropriate,” Johnson said. “And if we diminish that then there’s a caveat in the law that means we would need just 21 votes (not three quarters) to access the CBR,” Johnson said.

The bill, introduced by the House Finance Committee, would move $4.9 billion from the Permanent Fund earnings reserve, where the PFD comes from, into the Fund’s principal on June 30. By reducing the amount of money in the reserve, it reduces the amount of money available to legislators for appropriations. Under state law, the move would allow lawmakers to access the CBR with a simple majority vote.

“It’s really an accounting gimmick,” said Sen. Bill Wielechowski. “The danger is that if the stock market drops, Alaskans may not get a dividend next year, or may see no dividends or decreased dividends in the following year so it’s an extremely risky maneuver on their part.”

Rep. Johnson says HB 2002 is a last resort and the PFD won’t be harmed by the move. He says negotiations on the budget continue.

“We still may be a long way apart, but they are still talking and to say they failed would be totally inaccurate,” Johnson said.

Senate President Kevin Meyer says he wants to show the public the Legislature has made the deepest cuts possible before the really important conversation about revenue can be had. Sen. Meyer says negotiations are continuing.

“We are certainly open if they, the House Majority or Minority can find reductions somewhere else in the budget so there isn’t a net increase,” he said.

Meyer says postponing tax credits to oil companies in order to find savings is not an option.

“We could, and not pay all of the credits right away and extend them over several years, but we feel that all that is doing is just postponing your debt instead of paying it now when it’s due.”

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