Alaska Senate passes budget with $2,300 PFD, but House approval still needed

The Alaska Senate debates the budget and the PFD during the final hours of the regular...
The Alaska Senate debates the budget and the PFD during the final hours of the regular legislative session.(KTUU)
Published: May. 19, 2021 at 8:08 PM AKDT|Updated: May. 20, 2021 at 2:13 PM AKDT
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JUNEAU, Alaska (KTUU) - The Alaska Senate passed a largely flat budget with a roughly $2,300 Permanent Fund dividend, but it would still need to be approved by the House of Representatives to pass into law.

The dividend amendment passed the Senate on a 12-8 vote after heated debate. It would be equal to 50% of an annual draw from the Permanent Fund, following a new formula advocated for by Gov. Mike Dunleavy.

The 50-50 PFD vote followed one that failed in the Senate for a full statutory Permanent Fund dividend at roughly $3,400 per eligible Alaskan. That vote deadlocked the Senate 10-10.

Sen. Bert Stedman, R-Sitka, opposed the 50-50 dividend payment. He stressed during debate that spending over $1.5 billion for a PFD would be a “raid” on the Permanent Fund, overdrawing it above sustainable levels.

Republican Mike Shower, R-Wasilla, introduced the 50-50 dividend amendment. He said a second special session in August could resolve how to pay for the dividend in the long term, potentially with new statewide revenues.

The budget itself passed through the Senate on a 17-3 vote with less than an hour before the regular session ended at midnight on May 19.

The Senate wanted to pass a budget before the regular session ended so it could follow a timeline to adjourn before Memorial Day weekend during a special session.

On Tuesday, the Senate Finance Committee consolidated the operating and capital budgets into one bill and passed it onto the Senate floor for amendment debates on Wednesday.

The size of the PFD approved by the Senate is crucial.

A conference committee will now meet with legislative leaders resolving differences between the House and Senate budgets so a single bill can pass through the Legislature.

The House of Representatives did not include a PFD in its version of the budget. Under conference committee rules, legislators can choose the Senate’s PFD proposal, the House’s proposal or one in between, but the amount for the dividend could not be larger.

Added alongside the operating and capital budgets on Tuesday in the Senate Finance Committee was a broad outline for how to spend $1 billion of federal COVID-19 relief.

Stedman, who oversees the operating budget in the Senate, said decisions about the American Rescue Plan Act funds will be resolved during the conference committee process.

Several amendments to the budget bill passed on Wednesday, including one from Sen. Bill Wielechowski, D-Anchorage, that says it’s the Legislature’s intent to give return to work payments. Following a similar model to one being used in Montana during the COVID-19 pandemic, unemployed Alaskans would receive a one-time payment of $1,200 when they accept a new job.

Editor’s note: This article was updated with additional information.

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