Vital Alaska programs in limbo as legislators pause negotiations until August

Published: Jul. 2, 2021 at 5:44 PM AKDT
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FAIRBANKS, Alaska (KTVF) - Certain programs in the State of Alaska are seeing their funding stop as the state legislature failed to meet the three-fourths vote requirement to continue funding from the Constitutional Budget Reserve (CBR).

Since it was established in 1990, the CBR has become a funding source for various government programs. According to Representative Grier Hopkins, these include, “oil tax credits that we owe the oil companies to make sure that they get what the law says.”

They also include college scholarships and affordable power to rural Alaska through Power Cost Equalization, or (PCE). “All of those endowments have been swept into the CBR and not moved back to maintain those important programs for Alaska, and up until a few years, that reverse sweep had never been a political football, and now it’s being held hostage for a bigger Permanent Fund Dividend,” Hopkins said.

“Because we were not able to get the three-quarters vote, the scholarships are not getting paid out. The communities and the homes and the families in rural Alaska who rely on that Power Cost Equalization Program are going to see their utility prices skyrocket.”

In June, opponents of the continued funding argued that using the CBR for this purpose was fiscally irresponsible.

Ben Carpenter, District 29 Representative, said, “It is incredibly risky for us to pay down the CBR balance below the 500 million dollar level, and that is what this vote is going to do. It is going to allow us to spend all but the very last little bit of our CBR.”

Others decried the lack of compromise in coming up with this year’s budget, with District 8 representative Kevin McCabe saying, “It’s unfortunate that the minority has not had the input that we felt we needed for this budget. In fact, had we had that input, the PCE would be well protected, which is what we designed, which was part of our planks, actually, our platform was to protect the PCE from day one.”

But the process isn’t over yet. The Legislature is scheduled to meet in special session in August. “In that August special session, we will be able to revote on that Constitutional Budget Reserve funding, including the reverse sweep so that we can fund the Power Cost Equalization program as well as the college scholarships for UA scholars,” Hopkins said.

Also tied to the CBR vote is funding for some of this year’s Permanent Fund Dividend, the fate of which is in question following Governor Dunleavy’s veto of the $525 dollar amount on July 1st.

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