With the budget, PFD unresolved, the Legislature faces big challenges to adjourn on time
Part of the reason for the time pressure is the wait to receive official guidance from the U.S. Treasury Department on how to spend $1 billion from the latest federal COVID-19 relief. That guidance is set to be released on May 10.
Kodiak Republican Rep. Louise Stutes, the House speaker, said if the Senate, the House of Representatives and Gov. Mike Dunleavy work together that it is possible to pass a budget on time.
There have been initial meetings between leaders in the Legislature and the governor’s office on the budget and how to spend the COVID-19 relief. The governor introduced his spending plan on Monday but it’s certain to change through the legislative process.
“To what degree, that’s going to depend on the Legislature and how we view it and how we come to a meeting of the minds,” Stutes said.
The governor’s plan includes five broad spending categories such as $150 million to help the tourism sector and up to $140 million to go into the operating budget for state services.
Neil Steininger, director of the Office of Management and Budget, said he understands that the full $1 billion could be put in the budget for state services.
Across the aisle, legislators are beginning to formulate their own plans.
Rep. Cathy Tilton, R-Wasilla, said those discussions are just starting, but a bipartisan priority is to not grow the state budget with the one-time federal funds.
There’s also a widely-accepted proposal to spend the $1 billion over at least two years. That could also be a requirement from the federal government.
The now annual fight on the size of the Permanent Fund dividend could see further delays for legislators along with a three-quarter vote to stop dozens of state accounts from being drained. It’s unclear whether those debates will spill into a 10-day extension to the session or a special session.
“I just don’t have any handle on that just yet,” Stutes said about whether a dividend would be debated after the regular session ends. “I just don’t know where it’s going to end up.”
Tilton said she wants to adjourn on time but was realistic about the amount of legislative work required before the constitutional limit for the session.
“If we get the majority of the work done, I think that would be a positive for Alaska,” she said.
Dunleavy has not proposed using the federal relief package to help pay for a dividend, and it’s unclear if that is allowable.
Corey Young, a spokesperson for the governor’s office, said Dunleavy wants to follow state statute that requires a dividend be paid from the Permanent Fund.
Using some part of the federal relief for the operating budget could free up funds drawn from the Permanent Fund to go to the 2021 dividend.
Sen. Bert Stedman, R-Sitka, has said that idea could help Alaskans receive a more “robust” PFD than the $1,000 dividend paid in 2020.
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