Senate poised for capital budget vote
The Senate on Saturday is scheduled to vote on a budget bill aimed at restoring college scholarships, preserving an interstate cooperative medical school program and maintaining a rural energy assistance.
It’s the state’s capital budget that needed revisiting in this second special session because efforts in the House to pass a fully funded budget failed in June.
Senate Bill 2002 also funds highway and road projects that generate matching federal funds lawmakers say need approval by month’s end or risk losing access to that money.
“It is critical that we have a capital budget passed in the state of Alaska; almost $1 billion depends on us passing a bill with matching funds,” said Senate Finance Co-chair Natasha Von Imhof, R-Anchorage.
The bill features an effort to replenish several dozen funds depleted and shifted to the state’s Constitutional Budget Reserve. The familiar term is known as a “sweep,” and unless funds undergo a “reverse sweep” with a super majority vote, they remain in the CBR.
Last month the Republican House minority held back the necessary votes to restore the funding after a vote for a $3,000 Permanent Fund dividend failed.
And unless each chamber can produce the three-quarter vote, nearly $2 billion worth of funds will no longer be accessible by a simple majority vote.
The Senate Finance Committee essentially rewrote Gov. Mike Dunleavy’s initial offering presented to the committee Friday morning.
Newly hired budget director Paloma Harbour said the governor was willing to pay for the scholarships and energy assistance among other programs, but not restore the depleted funds.
“If there is enough in the general fund to cover it, it just takes a majority vote,” Harbour said. “It would help address immediate needs fairly well. It also will ensure it will cover needs we don’t know yet.”
Von Imhof took exception to the prospective uncertainty.
“You said if there is enough in the general fund, so I’d like to know which student? Is it first come, first serve? Which student are you going to throw overboard? Which student are you going to cover," she asked, pausing before adding, "Don’t answer that.”
Von Imhof cited two swept funds that have generated the most attention among lawmakers, plus another that quickly became topical as among the most troubling liquidated funds.
- Alaska Higher Education Investment Fund that would produce scholarships for nearly 5,000 students ($15 million) and the state’s medical school program, also known as WWAMI ($3 million).
- Power Cost Equalization Investment Fund, a nearly $1 billion, revenue generating account that would assist more than 190 communities state wide with energy assistance ($32 million).
- Vaccine Assessment Account, which now has a $21 million void after being emptied. The account came up two days after the state identified its first measles case.
University of Alaska scholarships have drawn significant attention since the administration announced the fund had been cleared out. This came on the heels of a $130-million veto and about one week before Moody’s Investor Service significantly lowered UA’s credit rating, making it more expensive to borrow money for various projects.
It prompted Sen. Click Bishop, R-Fairbanks, to remind the committee of other fiscal issues in play with the university.
“I’m assuming we’re going to have a university,” he said, “that they have somewhere to go to spend these funds.”
The full Senate is expected to vote on the bill at 11 a.m. Saturday.
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