The House Finance Committee released a preliminary budget Thursday that reduces agency spending, but refuses to adopt some of Gov. Mike Dunleavy’s sharper cuts.

The committee's substitute to House Bill 39 reduces agency spending by about $29 million compared to the current budget. It still spends $924 million more, however, than Dunleavy proposes.

House Finance is only the first step in the bill's long journey, as it could be another 10 days before the full House gets to offer amendments, vote and send it to the Senate for further review.

House Finance's co-chair, Rep. Neal Foster, D-Nome, said the committee will first consider its own amendments before voting on a final version.

“We’re working to make gradual cuts and at the same time, keeping the services that Alaskans have been asking for throughout the past week," Foster said. "It’s a fine line and it’s a balance that we have to strike, and we’re currently working on that.”

Rather than amend Dunleavy’s proposal, the committee based its recommendations on the current budget, passed last year by the Legislature and former Gov. Bill Walker. In doing so it rejected Dunleavy’s plans to repeal local tax authority for oil and gas infrastructure or commercial fishing, shutting down the Alaska Marine Highway and deep cuts to public education, Medicaid and the University of Alaska.

It also skipped Dunleavy’s proposal to send up to 500 prison inmates to an out-of-state facility. Instead, the committee's proposes relying on increased electronic monitoring plus other alternatives, leading to a 4.5 percent budget reduction for the Department of Corrections.

“I think one of the things we realized is we have to do business different,” said House Finance co-chair Tammie Wilson, R-North Pole, whose Corrections department subcommittee recommended the alternative. “We can’t just keep cutting. We have to change it.” 

Thursday’s budget comes several days after the House majority held a series of weekend budget hearings in Anchorage, Bethel, Fairbanks, Kenai, Ketchikan, Sitka and Wasilla. Members took additional public comment Monday upon returning to Juneau.

At a Thursday news conference House Speaker Bryce Edgmon, I-Dillingham, said a total of nearly 1,800 people weighed in on the budget at the various events.

“Our question to a lot of Alaskans was where do we meet in the middle?” Edgmon said. “What essential services do you want? What’s your version of a sustainable Permanent Fund dividend?[...]A lot of Alaskans, not all, but a lot of Alaskans are willing to take a reduced Permanent Fund dividend in order to protect schools and public safety and road services and other essential items that they find necessary to live their lives.”

Wilson, who led meetings in Wasilla and Fairbanks over the weekend, has served on the Finance Committee for eight years before becoming co-chair alongside Foster. She will handle the capital budget and other bills that come before the committee.

“Citizens want to be involved; they want to help us make those decisions and actually show us what they want the government to look like instead of us telling them,” she said. 

“It was very valuable to be able to go out and see so many different points of view. What I learned is Alaskans are resilient and they have the answers if we just take time, listen to them, vet it out and then put it into practice.”

Unlike past years, the operating budget will not have an appropriation for the Permanent Fund dividend yet. 

Last year, the budget vote got delayed a week while the House reached a compromise on a $1,600 dividend that ultimately survived former Gov. Bill Walker’s vetoes.

Dunleavy is still pushing for a dividend that follows a statutory formula and would pay eligible Alaskans about $3,000.

He also wants to back pay dividends that Walker and the Legislature reduced in each of the last three years.

Those are in separate bills, Senate Bill 23 and House Bill 47. SB 23 has already passed two committees and will next get reviewed by the Senate Finance Committee. HB 47 has not had a hearing and has been assigned to three committees: State Affairs; Judiciary and Finance.

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