House Finance Committee adopts HB 263 committee substitute, reverts to adjusted base and defers PFD appropriation
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Summary
The House Finance Committee voted 6–5 to adopt a committee substitute for HB 263 that reverts to an adjusted‑base FY27 operating budget, removes one‑time and supplemental items, and directs the full earnings reserve deposit to the general fund while leaving any Permanent Fund Dividend appropriation to later action.
Juneau — The Alaska House Finance Committee on Feb. 11 adopted, by a 6–5 vote, a committee substitute for House Bill 263 (the FY27 operating budget) that reverts the budget to an adjusted‑base posture and removes supplemental and one‑time items recommended by the governor.
Alexander Schroeder, the committee’s budget coordinator, told members the substitute (HCS 1 / work draft 34‑G) makes three broad changes: technical and conforming edits, removal of supplemental items under separate consideration, and a reversion to the Legislative Finance Division’s definition of an adjusted base. He said one exception to adjusted base modifies the earnings reserve deposit so that the full transfer would go first to the general fund rather than split with the dividend fund. "Depositing all the funds to the general fund first is a better starting position for the work of this committee," Schroeder said, adding any appropriation for a Permanent Fund Dividend (PFD) would be considered later in the amendment process and on the House floor.
The committee substitute restores the Alaska Marine Highway System to the number section, removes several language‑section proposals the LFD said fell outside adjusted‑base treatment, and changes multiple line items. Among the language changes Schroeder highlighted were removal of an inflation‑proofing appropriation to the Alaska Permanent Fund, removal of language authorizing the state's STEP employment and training program (with funding retained in numbers), deletion of Department of Revenue profit‑sharing fee language, removal of a requested multi‑year AMHS appropriation, elimination of an arbitrage rebate appropriation for airport bonds, and reductions to school bond debt reimbursements and several school aid deposits to 75% of statutory requirement (matching FY26 policy).
Schroeder summarized net fund‑source changes from the governor’s proposal: a reduction of $2,358,386,400 in unrestricted general fund, $11,170,600 in designated general funds, $7,772,100 in other state funds, and $31,328,200 in federal receipts. He said that if certain capital appropriations are included from the governor’s capital proposal, the operating picture would show roughly an $819,500,000 unrestricted general fund surplus.
Representative Stapp objected to aspects of the substitute and asked that his objection be entered on the record. "We went from a budget deficit to a budget surplus because you deleted the Permanent Fund Dividend," Stapp said, arguing the apparent surplus reflects the absence of a PFD appropriation and raising concern that disaster relief needs (including response to Typhoon Halong) were not being adequately funded in this version. Co‑chairs and supporters responded that the substitute is a procedural step to unwind one‑time items so policy decisions can be made at the committee table and that disaster relief would be addressed through the supplemental and amendment processes.
On a roll call vote, the committee recorded six yes votes and five no votes and the chair announced adoption of CS HB 263 finance version G as the committee’s working amendment.
What happens next: The CS will serve as the committee’s working draft as lawmakers move into subcommittee and amendment work; any appropriation for a PFD and supplemental disaster relief funding will be determined later in that process or on the House floor.
