Fiscal working group hears from Alaskans on the PFD, state services ahead of delayed special session

A legislative working group hears from Alaskans as it tries to forge a framework for a...
A legislative working group hears from Alaskans as it tries to forge a framework for a permanent fiscal plan.(KTUU)
Published: Jul. 29, 2021 at 9:57 PM AKDT
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JUNEAU, Alaska (KTUU) - An Alaska legislative working group was created to try to end the Permanent Fund dividend debates and create a framework for a permanent fiscal plan. On Thursday evening, it heard from Alaskans ahead of an Aug. 16 special session.

In contrast to heated budget debates in the summer of 2019 that saw packed public testimony events across Alaska, the Anchorage Legislative Information Office was more sparsely attended. After around an hour, the group went on several long breaks waiting for testifiers to come to the microphone.

Twenty-nine Alaskans did testify. Several called on the Legislature to pay a full statutory dividend at roughly $3,500, saying cutting it hurts lower-income Alaskans.

Brad Keithley, head of Alaskans for Sustainable Budgets, has long made that argument and gave written testimony to the group, advocating not to make dividend cuts.

“From our perspective, legislators should prioritize minimizing adverse impacts to Alaskan families and the economy,” he said.

Keithley argues that the governor’s 50-50 dividend figure is a compromise and should be a baseline but that new statewide taxes need to be implemented to pay for it. He advocates for a flat tax.

Several testifiers spoke in support of a program that helps Alaskans attain medical degrees in-state that requires a three-quarter vote to be funded. Others spoke in support of state services.

Laura Norton-Cruz, an Anchorage social worker, was concerned about cuts to state programs, including a veto by Gov. Mike Dunleavy to the Alaska Legal Services Corp. that provides civil legal help to domestic violence victims.

The working group has received dozens of written comments on how to solve the state’s fiscal crisis. It now has a little over two weeks to create a framework for a fiscal plan.

The governor delayed that session by two weeks on Thursday to allow the group to finish its work.

Republican Sen. Shelley Hughes, R-Palmer, said discussions had been positive since the group first met in early July. There have been agreements on underlying budget assumptions, and the challenge now is building the framework, she added.

That could include suggestions for a new PFD formula. Ideas for new statewide taxes, possibly contingent on implementing a tighter spending cap and defined margins for how much more the operating budget can be cut.

Hughes described discussions among the eight members as “walking on a tightrope” between their vastly different priorities. She said there has been agreement the Permanent Fund’s earnings account should be protected and that a constitutional amendment is the best path forward.

The recommendations put forward could then be drafted into legislation for the upcoming special session. A constitutional amendment would need support from two-thirds of legislators before requiring a majority of Alaskans voters to endorse it.

Few details about the group’s progress have been made public. Other legislative groups have tried in the past to end the dividend debates and forge a fiscal plan to little success.

Rep. Calvin Schrage of Anchorage, who is nonaffiliated and caucuses with the mostly Democratic House majority, was optimistic. He said work is going on behind the scenes but the Legislature faces an imposing deadline.

“We’re out of time, we have to put some sort of a solution into place,” he added. “We don’t have any savings anymore.”

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