Alaska lawmakers are scheduled to reconvene in another special session in just over two weeks to consider a long-term fiscal plan for the state — and to set the amount of this fall’s Permanent Fund dividend.
The Aug. 2 start date for the special session could be delayed by legislative agreement with the governor, or the session could drag on all month. The dominating deadline will come sometime in September, when the Department of Revenue will need to know the amount of the PFD payment, which usually is issued the first week of October.
Gov. Mike Dunleavy called legislators into their third special session this summer to consider his multiple proposals for the state’s fiscal future covering spending, use of Permanent Fund earnings, and possibly taxes.
Then after vetoing the dividend approved by lawmakers last month, saying it was too small, Dunleavy also wants lawmakers to redo their PFD decision during the special session.
Before they adjourned last month from their second special session, the House decided to set up a House-Senate, majority-minority working group to come up with recommendations for a state fiscal plan. The eight-member group met last week and was scheduled to meet again this week, though the pace may be insufficient to reach a recommendation for the start of the session Aug. 2.
Sen. Lyman Hoffman, co-chair of the group, said legislative leaders are committed to having the House and Senate act on the group’s recommendations.
“I would like to remind the people of Alaska, the House of Representatives and the senators, and especially the members of this committee: We have the opportunity to have the battle. We may not all win it. But at the end of the day, we should accept what work has been done,” said Hoffman, of Bethel.
The state has been grappling with budget deficits for most of the past 30 years as oil production has declined and the cost of public services has increased.
The Legislature has scaled back the annual Permanent Fund dividend in recent years to conserve enough cash to cover public services, while voting in 2018 to limit annual withdrawals from the fund’s earnings to pay for the dividend and the rest of the budget.
Dunleavy wants lawmakers to consider his proposals next month for a constitutional amendment to limit state spending and a constitutional amendment to prohibit new state taxes without voter approval. He also has said he will offer new revenue measures for legislative consideration but has provided no examples other than suggesting maybe it’s time to open up Alaska for gambling, from which the state would take a cut.
Separate from whatever the governor may suggest, the legislative work group was tasked with coming up with its own recommendations aimed at providing “fiscal certainty” for Alaska, including a balanced budget and resolving the lingering dividend dispute.
A Dunleavy spokesperson said it remains the governor’s intent to have the special session start Aug. 2, though some work group members and legislative leaders have suggested the date could be moved if the group needed more time to come up with a plan.
Southeast has two members on the work group: Juneau Sen. Jesse Kiehl, and Sitka Rep. Jonathan Kreiss-Tomkins, who serves as co-chair.
Speaking at a town hall in Haines on July 9, Kiehl reminded constituents that while lawmakers will set the dividend when they reconvene in special session, “it has to be a PFD we can afford.” Whatever goes out in the dividend has to leave enough money in the state checkbook for schools, public safety, roads, “the things we all need.”
He expects the Legislature also will find a solution to another mess left on the table after the last session — the loss of state funding for college scholarships and financial assistance to residents in rural communities with high-cost electric bills.
It will require a three-quarters majority vote of both the House and Senate to restore those accounts, which will require compromise that eluded lawmakers last month when they failed to muster the necessary number of votes.
That failure to achieve a three-quarters majority support for the entire spending plan also left Alaskans with a $525 PFD for this fall, which would have been $1,100 if the vote had passed to draw on other savings. The governor called $525 a joke and vetoed the entire amount, telling legislators to make it bigger when they meet in August.
Dunleavy has advocated for a PFD of around $2,400, about double of the past 10 years.
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