Alaska House sees progress grind to a halt on this year’s Permanent Fund dividend

Published: Aug. 26, 2021 at 4:23 PM AKDT
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JUNEAU, Alaska (KTUU) - The Alaska House of Representatives unsuccessfully tried to debate the size of this year’s Permanent Fund dividend twice on Wednesday.

There were two attempts to hold floor sessions. Neither saw 21 of 40 members in attendance to reach a quorum, a requirement to hear and pass bills.

House Speaker Louise Stutes, R-Kodiak, said she was “appalled” that no one from the 18-member Republican House minority caucus came to the floor.

“That’s a very sad statement,” Stutes added.

Rep. Cathy Tilton, R-Wasilla, said there were two reasons the minority did not attend: There has been little progress to deal with the state’s long-term fiscal challenges and a rushed schedule to pass a spending bill.

“Our request was that we slow that process down a little bit so we can look at the bill and prepare our amendments,” Tilton said.

Leadership from the largely Democratic House majority caucus argued Wednesday’s inaction increases the chances of no dividend being paid in 2021. Gov. Mike Dunleavy vetoed funding in June for a dividend previously approved by the Legislature.

Another House floor session has been scheduled for Friday, but legislators say it’s unlikely amendments will be considered then.

House Bill 3003 currently contains a roughly $1,100 dividend, the maximum amount that can be paid without overdrawing the Permanent Fund. That figure was shrunk from the $2,350 dividend proposed by the governor.

The bill also has $114 million to pay for refundable oil and gas tax credits after the Alaska Supreme Court ruled a bonding plan was unconstitutional. It would need approval by the House, the Senate and be signed by Dunleavy before becoming law.

The source of funding for the House dividend is uncertain. The House Finance Committee approved drawing $400 million from the general fund and $330 million from a savings account to pay for the PFD.

On Wednesday, Alaska Attorney General Treg Taylor released new guidance on which funds need to be drained unless an annual three-quarter vote passes. The guidance means scholarships will be paid to Alaska college students this year.

The Statutory Budget Reserve, the savings account earmarked as a source for almost half of the House dividend, will still largely need to be emptied.

House and Senate committees have now scheduled meetings next week to discuss the long-term future of the dividend and to try to formulate a fiscal plan.

Rep. Ivy Spohnholz, D-Anchorage, chairs the Ways and Means Committee. It will hear recommendations from a bipartisan working group that supported moving toward Dunleavy’s 50-50 dividend plan while saying that a new broad-based tax would likely be required to pay for it and the budget.

“We need to start figuring out what the options are, narrowing down what the options are, and see if we can get to some agreement,” Spohnholz said.

Rep. Andy Josephson, D-Anchorage, says two-thirds of the Legislature simply does not support putting the governor’s preferred dividend formula into the Alaska Constitution. There are potentially other impediments to enacting a fiscal plan.

“Next year’s politics definitely colors what’s happening, that’s a reality,” Josephson said about the 2022 election which will decide who will be Alaska’s next governor.

The Senate is waiting to see what the House decides for this year’s dividend before it acts. Committee hearings are beginning on Friday to deal with the state’s long-term fiscal challenges.

Senate President Peter Micciche, R-Soldotna, had said at the beginning of the session that he was “cautiously optimistic” progress could start to be made. He reiterated that on Thursday.

“The majority of the Senate wants to move forward on a fiscal plan,” he said about the dividend. “And move Alaskans past this struggle that we’ve been facing for the past seven years.”

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