Alaska Legislature passes a budget with $1,000 PFD

Published: Mar. 29, 2020 at 1:39 AM AKDT
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The Alaska Legislature has passed a budget that delivers a roughly $1,000 Permanent Fund dividend check in October to eligible Alaskans.

The Senate had included a second dividend in its budget to help Alaskans struggling with the economic impacts of COVID-19. That second

was removed by a special committee formed to resolve differences between the House and Senate budgets.

While the budget has passed through the Legislature, it’s not certain that it will be signed into law in its entirety. The governor has the power to veto the entire budget or individual spending items within it.

Earlier in the afternoon Saturday, the budget changed substantially. A complicated funding amendment was added that tied the size of the dividend to $75 million in public health funding to combat COVID-19.

If a three-quarter majority vote in the Senate and House had failed, the dividend would have dropped to $500, the coronavirus funding would have disappeared and the budget for the upcoming fiscal year would only have funded state government for 8-9 months.

Dozens of

on July 1 that are used for everything from paying for university scholarships to helping Alaskans in rural areas with their power bills.

With the threat of COVID-19 causing anxiety in the Legislature, advocates of packaging the critical provisions together in one bill said it ensured lawmakers could end the session quickly. Critics said the amendment was being used to compel supporters of a full PFD to accept a $1,000 dividend.

The brinkmanship of the newly-inserted budget amendment succeeded and the budget passed, fully funded.

The House needed to reach a 30-vote threshold. It passed the budget on a 30-6 vote with four members excused.

Deciding on whether to support the budget split caucuses and caused uncertainty.

Sen. Peter Micciche, R-Soldotna, said he struggled with his vote but he wouldn’t cost families hundreds of dollars by voting against the budget and delivering a $500 dividend.

Anchorage Democratic Sen. Bill Wielechowski said he couldn’t support the budget with a reduced dividend and thousands of Alaskans facing unemployment.

Some lawmakers expressed frustration that funding to curb COVID-19 was tied to the dividend.

“Right now, I’m put in a position where my vote risks and gambles the lives of Alaskans,” said Rep. Cathy Tilton, R-Wasilla, who voted for the budget.

Supporters of a smaller dividend say with rapidly dwindling state finances that Alaska simply couldn’t afford to pay a dividend over $1,000 -- let alone a second $1,000 PFD check.

Sen. Bert Stedman, R-Sitka, said lawmakers did the best they could with the funds available.

In a speech on the floor, he focused on the funding in the budget to curb the coronavirus. “We need to respond as fast as we can and protect our citizens,” Stedman said.

Anchorage Democratic Sen. Tom Begich supported the budget saying it is critical to fund essential services at a time of crisis.

Supporters of a full statutory dividend were furious at what they described as “strong-arming” tactics to tie the PFD to COVID-19 aid.

“I’m stunned,” said Sen. Mike Shower, R- Wasilla, about the decision to remove the second dividend from the budget and pay a single $1,000 dividend check.

Shower was frustrated that state spending hadn’t dropped while the PFD was shrunk. “Alaskans, you better tighten your belt because we’re going to keep spending,” he said.

Some Democrats were equally annoyed.

“We need to give Alaskans hope,” said Sen. Donny Olson of Golovin, calling for immediate spending for needy people across the state.

The budget that passed spends heavily from the Constitutional Budget Reserve, the state’s one remaining savings account. The CBR will be left with roughly $458 million, Stedman said. “Which is a pretty sparse balance.”

The budget that did pass was left largely unchanged from the one that passed last year. The Legislature did include more funding for municipal school construction costs. $30 million of funding above the funding formula was also set aside for schools.

The work of the Legislature is likely not over for the year.

“We will be back here with who knows how big a bill,” Stedman said, explaining that lawmakers are all but certain to meet again later in the year to pass further spending measures to cope with COVID-19.

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