Alaska Legislature divided with frustration at a fruitless fourth special session

JUNEAU, Alaska (KTUU) - The fourth special session of the Alaska Legislature must end at midnight on Tuesday, but it is virtually certain that no legislation will pass before then to resolve the long-term future of the Permanent Fund dividend.

Six conservative Senate Republicans have called on members of their own party, and caucus, to advance bills to the Senate floor through a strongly-worded letter.

“It may be unusual, but unusual times call for unusual measures,” said Sen. Shelley Hughes, R-Palmer.

She was one of six signatories to the letter addressed to fellow Republican Sens. Bert Stedman and Click Bishop, who are the co-chairs of the Senate Finance Committee. That committee has several bills before it to address the state’s fiscal challenges, but it has held no hearings during the special session.

The Capitol has been virtually empty and most legislators’ offices have been empty. There have been few committee hearings and even fewer substantive House of Representatives and Senate floor sessions.

And the first three special sessions were expensive. The Legislative Affairs Agency manages the Capitol building and shows they cost upwards of $1.6 million combined, including per diem payments.

Between sessions, a bipartisan legislative working group called for lawmakers to work toward a 50-50 constitutional dividend formula. It would be contingent on new annual revenues, perhaps in the hundreds of millions of dollars, to be implemented to pay for it and the budget.

Stedman said earlier in the month that work on a fiscal plan should go on during the regular session that starts in January.

“All senators and House members need to be present and all the staff need to be here in the building,” he said. “And we need to have a thorough and informed discussion on the subject.”

Stedman said his plan is to get a fiscal package ready for a vote in the Senate by the end of January before moving onto the operating budget. And, he wants several options to send over to the House.

“There’s more than one way to skin a cat,” he said.

Bishop won’t be drawn into the letter, saying, “I just don’t talk caucus politics,” but he essentially agrees with Stedman that work needs to happen during the regular session.

Anchorage Republican Sen. Mia Costello also signed the letter and is also frustrated at the inaction.

”We should have done something,” she said about the ongoing special session. Costello said the Senate Finance Committee is currently holding up progress.

Sen. Bill Wielechowski, D-Anchorage, sits on that committee and has been disappointed there haven’t been hearings. He said it’s clearly possible for legislators to call into hearings remotely as they have been doing that regularly during the pandemic.

The divides among Senate Republicans are reflective of the divides within the Legislature as a whole. Gov. Mike Dunleavy, another Republican, is frustrated at the lack of legislative progress.

“We’re not going to have another special session after this, it’s pointless. There’s no reason in doing it,” he said on Thursday.

Some legislators have accused the governor of not doing enough to support new taxes to pay for a 50-50 dividend and the budget.

Rep. Ivy Spohnholz, D-Anchorage, chairs the House Ways and Means Committee, which has been holding some hearings to lay the groundwork for the regular legislative session, and says that has been the biggest impediment to progress. That feeling has been echoed by many in the Legislature.

Dunleavy points the finger back, asking why Alaska needs a legislature if the governor is tasked with doing everything. He also says he’s provided the support, space and everything legislators need to be productive.

The argument doesn’t hold water for Stedman, who says the governor, along with his administration, needs to be more involved to get a package over the finish line.

Dunleavy, like most lawmakers, has not been in the Capitol for most of the fourth special session. He wasn’t in Juneau for the majority of the third one, either. Longtime legislative staff say that’s unusual, particularly if the governor is seriously interested in seeing meaningful reform.

That leaves a clear explanation for Stedman why this special session was called in the first place.

“It’s politics, it’s election-year campaigning,” he said.

Concerns over COVID-19 have kept some lawmakers away from the Capitol and so has the lack of consensus. Frustration and bad relationships aren’t helping. Some legislators cite the need for a break and next November’s election is looming large, too

Across the aisle, there is at least one point of agreement: No dividend proposal currently has the two-thirds of legislative support required to pass a constitutional package onto voters at the next election.

With high oil prices, there is a bright spot. The state’s revenue picture is improving, at least in the short term. Deputy Commissioner Brian Fechter of the Alaska Department of Revenue said a new revenue forecast is being formulated, but the state is looking at the “very real possibility that we’ll have a significant surplus.”

That could help the state pay its bills, if a surplus materializes and the oil price doesn’t drop, but as some legislative watchers argue, it could also delay progress on legislators making tough choices.

This year, the Legislature will have spent the longest time in session during a calendar year since statehood. The lack of substantial progress on a fiscal plan has frustrated many.

“I want Alaskans to know that I’m hearing them, I want to take care of the matters and I’m not one of the ones kicking the can down the road,” Hughes said.

But, as Stedman argues, there is also reason for legislators to feel happy with themselves.

“We have a balanced budget, we paid a reasonable dividend and nobody got impacted with tax increases,” he said. “In all other states in the union that would be pretty darn successful.”

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