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Special session increasingly likely to resolve federal COVID-19 relief, and potentially the PFD

The exterior of the Alaska State Capitol in Juneau, Alaska.
The exterior of the Alaska State Capitol in Juneau, Alaska.(KTUU)
Published: May. 4, 2021 at 7:27 PM AKDT
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JUNEAU, Alaska (KTUU) - With the constitutional deadline for the regular session just over two weeks away, it’s increasingly likely that the Alaska Legislature will need to convene a special session to decide how to spend from the latest federal COVID-19 relief package.

The same special session, or perhaps another one, may be needed to debate the 2021 Permanent Fund dividend if one does not pass before May 19. It could also focus on the long-term future of the PFD.

A meeting among legislative leaders on Tuesday saw Sen. Bert Stedman, R-Sitka, argue that a delay in deciding how to use American Rescue Plan Act funds would allow legislators to spend more wisely from the $1 billion package.

“There’s some of it that could go out right away,” he said, explaining some of that money would be included in the operating budget. “I also feel that we should take probably half of it and carry it forward until next year.”

A priority for Stedman, who oversees the operating budget in the Senate, is quickly disbursing another $1 billion allocated to Alaska in non-flexible federal funding.

Part of the challenge for legislators has been waiting until May 10 for official guidance from the federal government on how the flexible funding can be spent. That would see legislators potentially scrambling to come to an agreement on how to spend $1 billion before the regular session ends just nine days later.

Senate President Peter Micciche, R-Soldotna, said a summer special session on the federal funds is not a certainty, but hearing from Alaskans could ensure that the money is better targeted to help businesses and Alaskans who really need it.

Legislators say lessons have been learned from a previous federal COVID-19 relief package that went out quickly last year.

“I think everyone can argue that that money could have been spent more carefully, more efficiently,” Micciche said.

There is a strong desire across the board to pass an operating budget before the end of the regular session. Even that could be a challenge with the budget stalled in the House of Representatives.

“The calendar is turning against us,” Stedman said. “We’re expressing point blank that it’s going to be very difficult to get our budget done unless we get things moving, and things aren’t moving too fast.”

Senate Minority Leader Tom Begich, D-Anchorage, argues the Legislature has the ability to pass a budget and design a spending plan for the American Rescue Plan Act funds before May 19. Begich says the Senate minority will push for that.

One big outstanding question is the 2021 Permanent Fund dividend with the Legislature more divided than ever on what size it should be.

“The dividend will not be resolved in the next two weeks,” Begich said, “And that will be the special session.”

Another outstanding question is what should happen to the PFD in the long term.

Micciche and Begich both said separately that Gov. Mike Dunleavy has expressed an interest to them in holding a special session to debate the long-term future of the dividend. Dunleavy has proposed changing the formula that calculates the PFD as long as that change is supported by an advisory vote.

Micciche is advocating for an “all-in” approach to fix the state’s structural deficit with everyone giving a little. But he said the dividend has been “the elephant in the room” for the past several years and that resolving it is critical.

“I think it’s imperative that we get together and think about that issue and nothing else,” Micciche said, advocating for a dividend-focused special session.

There is broad agreement that the Legislature does not have the two-thirds of legislators necessary to call their own special session on any topic. If that is the case, the governor would need to step in and call one himself for the PFD, how to spend the federal funds or potentially for an annual procedural vote needed to keep state accounts full.

The governor’s office would not confirm that a PFD special session would take place. Corey Young, a spokesperson for the governor, said any decision on special sessions would take place after the regular session ends.

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