With the notable exception of Rep. Bart LeBon, nearly all of the Republican House members who spoke about the bloated Senate budget Saturday pandered to the people.

They said that distributing $3.6 billion to Alaskans in the form of dividends and energy relief was a brilliant way to use the extra billions the state hopes to collect with the oil price spike created by the war in Ukraine.

LeBon spent his career as a banker and has a solid grasp of numbers, a skill that many in the Legislature don’t have. He gave a simple rundown of the Senate budget and its fatal flaws.

The Senate budget was based on the wish and prayer that oil prices for the fiscal year starting July 1 would remain higher than they have been for many years. Even so, the budget contained a deficit of more than $1 billion that would have to be covered by drawings on savings and federal funds.

If the prayers for high oil prices are dashed because peace breaks out or a recession slows the world economy, the state would have to make an unsustainable withdrawal from the Permanent Fund.

The speculative and risky nature of the Senate budget was lost on the 18 Republicans and Democrats who put their faith in high oil prices. Several even claimed to be certain that oil prices will stay high and no one should worry about oil prices falling.

Twenty-two House members, both Republicans and Democrats, voted for a more prudent policy.

“We must balance the needs with the wants,” said LeBon. In the last month the Alaska Permanent Fund has lost about $3 billion, which is close to what the entire fund draw for the next year’s budget will be.

In the end, the House took the sensible route, voting 22-18 to reject the Senate budget and send it to a conference committee that will start meeting Sunday. The committee will reduce the Senate supersized budget to something more reasonable.

What would be more reasonable? Instead of giving out $3.5 billion to $3.6 billion in cash payments to Alaskans, how about cutting that in half and saving $1.7 billion or more? That would be a start.

A dividend and energy relief check package totaling $2,500 would be a good compromise from the Senate total of $5,500 per person.

House Speaker Louise Stutes said later, according to the Anchorage Daily News, that Gov. Mike Dunleavy had said he would veto the $840 million in energy relief money in the Senate budget, but he never said so in public.

Had the House accepted the Senate budget Saturday, Dunleavy would have been under immediate pressure not to veto the $840 million from Alaskans who remember his promises to pay them back dividends.

Having made no veto pledges in public, Dunleavy would have likely not vetoed any of that money, seeing that as the best way to get himself reelected, while ignoring the long-term fiscal consequences.

Your contributions help support independent analysis and political commentary by Alaska reporter and author Dermot Cole. Thank you for reading and for your support. Either click here to use PayPal or send checks to: Dermot Cole, Box 10673, Fairbanks, AK 99710-0673.

House rejects Senate plan to break the bank, setting stage for more reasonable budget