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The Senate passes a lower PFD version of the operating budget while the Governor addresses the status of the correspondence decision

JUNEAU, Alaska (KTUU) – With about two weeks left in the current session, Senate lawmakers on Wednesday officially passed their version of the state budget, which now heads to the House of Representatives.

The Senate's $6.25 billion operating budget was approved by a 17-3 vote, leaving about $196 million in excess revenue for pending legislation and the state's capital budget, which is currently being debated by House lawmakers becomes.

A key difference between the Senate's version of the operating budget and the House's version is the size of the permanent fund dividend. Concerned that the House version could create a potential deficit in the hundreds of millions of dollars — taking into account upcoming legislation and the state's capital budget — senators reduced the PFD to about $1,600 compared to that House PFD of approximately $2,300.

The Senate also added $11.9 million to meet the federal government's equity requirement for 2022, as the government told the state in March that state funding was insufficient for Alaska's highest-need schools.

However, despite the differences between budgets, there are similarities between the two. Both include one-time funding to increase the base allotment for students by $680, as well as $4 million for the Municipality of Anchorage to continue operating homeless shelters throughout the summer.

Before the Senate version of the operating budget passed Wednesday, the Senate minority introduced a series of amendments. One of them, at the request of Governor Mike Dunleavy, was to increase Alaska's statehood defense by $2 million.

“Alaska is under attack by the current president of the United States,” said Sen. Mike Shower, R-Wasilla. “I believe 64 is the number we are at, direct, direct executive orders shutting down this state.”

However, Senate Finance Co-Chairman Sen. Donald Olson, D-Golovin, noted that the request was withdrawn during the committee process.

“The chairman of the Legal Department subcommittee,” Olson said, “told us that they had enough funds to cover the current cases and decided not to increase the fund.” What was stated was that $5 million Dollars had not yet been used.”

Now that the Senate has approved its version of the budget, it will go to the House of Representatives for a vote. Unless a majority of House members agree to the changes made by the Senate, the budget will be sent to a conference committee that will work out the differences between the two versions.

Regardless, saying he has never seen anything like this in the history of the state of Alaska, Dunleavy, R-Alaska, is calling on the courts to act urgently and grant the state a stay on the constitutionality of the state's correspondence program reimbursement allowances.

Dunleavy said Wednesday that the judge's ruling that public funds cannot be used for private religious or educational expenses was too broad and would stall Alaska's correspondence programs. Dunleavy added that it is a matter that must be appealed to the state Supreme Court, noting that Alaska law prohibits the use of allotments by religious and private organizations, but not by private or religious organizations Educational institutions, allow.

The governor also emphasized that Alaska's correspondence system is not a voucher system in which reimbursements go directly to an institution; Instead, families receive reimbursement for their educational expenses, for example for private teachers.

Dunleavy hopes the lower court will issue a stay in the next few days and also expressed concern that the judge's decision calls into question the definition of “private,” saying that could have unintended consequences.

“Does this affect your post-secondary education where you donate public funds to APU (Alaska Pacific University), which is private?” he said. “Does this mean that preschools may receive educational funding, which can be construed to mean educational purposes that may be private or non-profit? We do not know it. That's why we say: “A quick fix that some are in favor of – we don't see how it fits into the ruling at this time.”

State lawmakers are preparing legislation to allow only short-term stay or have the Alaska Supreme Court uphold the judge's decision. Last week, lawmakers in the state House of Representatives asked a judge who is considering a state appeal on the constitutionality of home school funding to send a formal request to delay a decision until next summer.

Over in the Senate, SB 266, sponsored by Senate Education Chairman Sen. Loki Tobin, D-Anchorage, would repeal the current language the judge cited in his ruling that the use of the funds was unconstitutional. The bill would also reinstate portions of the 2005 and 2008 distance learning program regulatory packages sponsored by the Alaska Department of Education and Early Development.

By changing the term “allocation” to “fund account,” the bill continues to authorize distance programs to provide students with funds to pay for academic instruction and materials. However, the bill stipulates that funds cannot be used for private and religious school education costs.

The bill also eliminates the blanket opt-out provisions of the statewide assessment and prevents allocations of education funds from being transferred.

The House Education version, HB 400, contains none of this and instead includes language stating that the state board of education shall adopt regulations consistent with the state constitution, which currently requires that no money from public funds may be paid directly for the benefit of any religious or other private educational institution.

However, a constitutional amendment is currently in committee in the House Judiciary Committee that proposes putting a question before voters that could decide whether or not to allow the use of public funds for religious and private school expenses. In order to be voted on and taken into account for the upcoming parliamentary elections, the change must first be approved by two-thirds of MPs in a joint meeting.

The bill's sponsor, Rep. Sarah Vance, R-Homer, said she doesn't expect anything to happen this session and called the legislation a “conversation starter.”

Also Wednesday, the governor was asked about a notice the Anchorage School District sent to families that said the judge's decision, pending a stay, invalidates the allotment refund policy in its entirety. This decision, the ASD said, prevents the district from processing pending or yet-to-be-submitted reimbursement requests.

“We have issued guidance for school districts,” Dunleavy said. “We actually sent a letter and are meeting with all the school districts that offer correspondence programs. Anchorage will do what Anchorage does. I do not agree. I don’t know why they do this.”

Dunleavy said he would be willing to call a special session once the state gets more clarity from the courts.

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Anna Harden

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