UPDATE: The state House voted 22-18 to reject the Senate budget Saturday afternoon. The 22 votes came mostly from Democrats and from several Republicans. The conference committee named to work out differences on the budget in the next few days are Reps. Kelly Merrick, Dan Ortiz and Bart LeBon.

Original blog post follows:

I spend too much time on Twitter, yapping about state politics and news coverage.

As the House delayed voting on whether to accept or reject the Senate budget Thursday, I wrote this bit of speculation about internal House politics and how the Republicans are trying to break the bank.

On Friday, Anchorage Rep. Geran Tarr, who is one of the Democratic House members that may accept the Senate budget, said the sentence above was shameful. The bill in question is HB 5, a good bill, sponsored by Tarr and a dozen others, most of them Democrats. What’s curious is that the Republicans aren’t cosponsors of her bill.

She took offense to what I had written and demanded an apology.

I responded that I would apologize to the Republican men she says were treated shamefully as soon as she lets the public know she will cast a responsible budget vote.

That would demonstrate to me that the Republicans were not counting on her budget vote and were not there to show moral support on the budget.

On Saturday morning she said on the House floor she would probably vote to oppose the budget. Having heard that, I apologize to her and the Republican men who showed up to back her bill. I was wrong to say they were counting on her support.

The House may vote on the budget today. The so-called conservatives are in the favor of the Senate plan, mainly because it contains $3.5 billion to $3.6 billion in cash payments to Alaskans. This is entirely about the coming elections and buying the votes of those who put the Permanent Fund dividend above all else, including the financial future of the state.

On Friday, Big Lake Republican Rep. Kevin McCabe sent out the following harangue, claiming that Gov. Mike Dunleavy is not strong-arming legislators to back the reckless Senate bill and calling Rep. Zach Fields a liar. I think Fields is telling the truth and McCabe is spinning like a top.

Everything we know about Dunleavy says that he is praying for the Senate bill to be enacted, as he has been promising big dividends for years without delivering.

Any private promises that Dunleavy makes to legislators about vetoing the energy relief payments in the bill, more than $840 million, should be treated with suspicion.

If this bill passes, there will be immense pressure on Dunleavy to not reduce the $3.6 billion in payouts, about $5,500 per person. He is risk-averse and will not want to backtrack on years of public promises about inflated dividends.

McCabe complains about the Anchorage Daily News and reporter Iris Samuels. She has done a good job on this complicated matter and her account is far more reliable than McCabe’s. The ADN is not being intellectually dishonest.

This is what McCabe said in an email to an Alaskan who wrote in opposition to the Senate budget:

Zach Fields is lying. This was not the Governor’s budget and he has not been doing anything to twist anyone’s arms. The ADN and Iris are simply wrong, either on purpose or because the reporter was not paying attention. Dunleavy is NOT behind this in any manner. Mike Shower proposed this PFD to follow the law, NOT as a negotiating tactic. The PFD did not affect forward funding of education.

Returning to Alaskan’s what is rightfully theirs, is not irresponsible at all. And as bad as our businesses have been hit, they need the shot in the arm. The impact will be more money in the economy to combat inflation. Since the state has no ability to print our own money, we have little control over the inflation caused by the federal government. We can, however, equip our citizens to overcome inflation and keep businesses working, which provides jobs and an actual economy.

After all budgetary items are accounted for from the Senate’s budget, this is our remaining “savings accounts” for FY23:

$522.8M Statutory Budget Reserve (SBR)

$1.3B Constitutional Budget Reserve (CBR)

$15.6B Earnings Reserve Account (ERA) of the Permanent Fund.

A combined total of $17.44 Billion in savings and more than $60 Billion in the principle of the Permanent Fund.

There is also predicted to be more than a $500M surplus from fy22 budget at the end of June...point is the ADN is being intellectually dishonest.

Distribution of a lawful PFD/Energy Relief of the people’s resource wealth is approximately $99 Million to the economy of each House District!

This is the largest budget in state history, and obviously needs trimming, but it includes much needed infrastructure projects like roads and ports. Unfortunately, the Senate sent a combined budget that includes both operating and capital expenses into one up or down vote. The capital budget should have been sent over as a separate bill, but it did not, and here we are. The reduction in forward funding is not “stripping education funding” it is simply a reduction of FORWARD funding. The dividend did not do that. The funding for the Port of Alaska, the Port of Nome, Katlian Road in Sitka, and the infrastructure money in the MatSu, were the funds that impacted forward funding of schools.

I was elected by an overwhelming majority to follow the law, fight for your lawful PFD, and give the people the first draw before government. You have been denied your lawful PFD the last 6 years, and now have an opportunity to have some much needed relief. This is an easy decision for me - I will follow the law. All departments, including education, are fully funded in FY23. This lawful dividend belongs to the people.

After reading McCabe’s diatribe I contacted budget experts in Juneau for their take on what he claimed. Here is what one of them said.

The problem is, we “have’ the money, per the forecast, for this giant PFD. We just end up spending all of it.

The forward funding of education remains in the Senate budget, but the way it's structured that's the first thing that gets eliminated to balance the budget. There's a $1 billion deficit for FY23, even after eliminating forward funding.

The $522 million that McCabe mentions is an end-year balance (6/30/23) for the Statutory Budget Reserve.

It is overstated.

First, we're going to come up short for the FY2022 forecast, which is the fiscal year that ends in 7 weeks. We'll likely miss it by between $150-$200 million, so the SBR starting point in the fiscal summary sheet- $1,570 million- will be reduced by that amount.

The $1,050 deficit for FY23 is based on $101 oil. If the actual price is merely in the mid $90s, we zero that out and then we're either into the CBR (without a 3/4 vote) or an overdraw from the permanent fund. Yes, at this moment we're sitting on a large slug of short term money. So we "can" afford a fat dividend. It's just incredibly short sighted and irresponsible.