Legislative Compromise Finalized; Governor Walker Signs Budget and POMV Bills into Law
Lawmakers Must Remain Focused on Comprehensive Long-Term Fiscal Solutions
Anchorage – Alaska Governor Bill Walker signed the Fiscal Year 2019 operating and capital budget bills into law today during a ceremony in Anchorage. The governor also signed legislation instituting a percent of market value (POMV) system for the use of earnings from the Alaska Permanent Fund.
“These bills are the product of bipartisan compromises to protect our investments in public education, public safety, and the health of our economy,” said Speaker of the House Rep. Bryce Edgmon (D-Dillingham). “This year we prioritized protecting the Alaska Permanent Fund and ensuring a larger PFD for Alaskans. Thanks to the commitment of our coalition this year’s PFD is $500 larger than last year.”
Senate Bill 26 limits the amount the Alaska Legislature can spend from the earnings of the Permanent Fund in future years. The bill allows for the use of a limited amount of the earnings to pay dividends to Alaskans and to help pay for essential public services. The POMV draw for the next three years will be limited to 5.25 percent of the fund’s average value over the past five years. The allowed draw will then drop to 5 percent. In the negotiations that allowed for the passage of SB 26, the members of the Alaska House Majority Coalition insisted on a strict spending cap on the earnings of the Permanent Fund to prevent lawmakers from making irresponsible ad-hoc draws that could jeopardize the health of the entire fund. The draw in Fiscal Year 2019 will be limited to $2.7 billion.
The $6.27 billion operating budget signed by Governor Walker today authorizes the payment of a robust $1,600 PFD to each eligible Alaskan and uses $942 million to inflation-proof the Alaska Permanent Fund for the first time in three years. The approved capital budget bill appropriates $148.6 million in Unrestricted General Funds to leverage $1.1 billion in federal funds for Alaskan infrastructure and jobs.
“The productive and respectful negotiations between the House, Senate, and Governor Walker this year allowed the Alaska Legislature to get done three days before the deadline in the Alaska Constitution. More importantly, the negotiating process showed that lawmakers could leave behind the petty politics that too often makes it impossible to reach consensus on solutions for Alaskans,” said House Finance Committee Co-Chair Rep. Neal Foster (D-Nome), who was tasked with guiding the capital budget bill through the legislative process in the Alaska House of Representatives.
The operating budget bill, House Bill 286, features $2 million for pre-k grants, $11.75 million for Alaska Performance Scholarships and Alaska Education Grants, and $10 million above the Governor’s original proposal for the University of Alaska system. The capital budget bill, Senate Bill 142, includes an additional $20 million in education funding for FY 2019, $12 million for substance abuse treatment to address the ongoing opioid epidemic in Alaska, and $20 million for the Port of Anchorage reconstruction project.
“Significant progress was made this year to put Alaska’s fiscal house in order, but the job is not done. The Alaska economy is still in a recession, and we are saddled with a flawed oil tax system that gives away too much of the value of our oil. The people of Alaska are right to demand solutions. Working together we can move Alaska forward,” said House Finance Committee Co-Chair Rep. Paul Seaton (R-Homer), who was tasked with guiding the operating budget bill through the legislative process.
For more information, please contact Alaska House Majority Coalition Press Secretary Mike Mason at (907) 444-0889.