House passes Capital Budget, restores scholarship funding

Government Relations


After two previous attempts, the House passed important revisions to the FY20 Capital Budget on July 29. The legislation, Senate Bill 2002, was dubbed by lawmakers as “Capital Budget 2.0.” It authorizes the use of the Constitutional Budget Reserve (CBR), and reverses the fiscal year-end “sweep” of state designated funds, which left a number of critically important programs around the state unfunded. This required a ¾ super majority vote in both the House and Senate, and was an important compromise for this Legislature.


The bill restores 70 percent of the capital funding vetoed by the Governor, provides the state’s match for federal highway and aviation infrastructure projects, and funds the crime reform legislation passed during the regular session. The legislation also restores $7.5 million for university deferred maintenance, and $2.5 million for the Alaska Earthquake Center’s USArray initiative at UAF.


In passing the bill, lawmakers also reconstituted $350 million into the Alaska Higher Education Investment Fund, which ensures that this year’s performance scholarships, needs-based education grants and the WWAMI medical school program have a valid source of funding. The higher education fund was restored through a budget mechanism known as the “reverse sweep,” which prevents the endowment’s balance from being deposited into the CBR. It is estimated that 30 percent of UA students are relying on one of these financial programs for this fall semester.


Yesterday, Gov. Mike Dunleavy’s office confirmed that the governor will not veto the Alaska Legislature’s fix for the “reverse sweep.”