House sends $1,100 dividend back to Senate
Progress is being made two weeks into the special session to settle this year’s PFD but many House Republicans insist that it will come at the expense of a so-far elusive long-term solution to the state’s financial imbalance.
House Bill 3003 containing appropriations for Permanent Fund dividends of approximately $1,100 per eligible Alaskan passed the House Aug on a 24-16 vote with all of the opposition coming from members of the House minority Republican caucus.
Rep. Kevin McCabe, R-Big Lake, stressed in floor debate that most members of the Republican caucus compromised by backing Gov. Mike Dunleavy’s “50-50” plan to use half of the available Permanent Fund earnings in a year on PFDs because it would result in dividends starting at about $2,350, which is still far less than what the currently disregarded statutory formula calls for of more than $3,000.
“I’m a full PFD guy,” McCabe said. “The $2,350 was our compromise. It was a huge compromise for us and it was met, I think, with a slap in the face.”
McCabe was an active member of the bicameral Comprehensive Fiscal Plan Working Group that produced a series of recommendations before the special session to steer other lawmakers towards solutions durable enough not just for the unforeseeable events of the future but also to pass the Alaska Legislature.
Nikiski Republican Rep. Ben Carpenter, also a member of the fiscal plan committee, argued for voting for a bill to pay this year’s PFD before tackling the big, underlying issues allows lawmakers to avoid the problem one more time in the 30-day special session that started Aug. 16.
“What it doesn’t do and what we haven’t done is the very thing we were supposed to come down here for, which is to address a long-term fiscal plan,” Carpenter said of HB 3003. “We have to say ‘no’ to something in order to say ‘yes’ to something else.’
McCabe asked to move House Joint Resolution 7, the proposed amendment to the governor’s 50-50 Permanent Fund and dividend plan into the Constitution, out of the House Judiciary Committee via a floor vote that ultimately did not pass.
HJR 7 was scheduled for a hearing Sept. 1 as of this writing and HB 3003 is on its way to the Senate for consideration.
The $1,100 PFD matches what the budget conference committee negotiated in June.
The Senate originally passed a PFD of approximately $2,300 by a narrow margin, with supporters saying it was the first step towards a compromise at the time.
House legislators initially avoided the PFD in the budget, only approving a $525 per person dividend after refusing to approve a draw from the Constitutional Budget Reserve that requires a three-quarters vote of each body that the conference committee tied to other appropriations — including the $1,100 PFD — in an attempt to gain support.
Dunleavy called the $525 PFD “a joke” shortly after vetoing it from the operating budget.
Despite the tension in the House, Senate President Peter Micciche said in an interview prior to the HB 3003 vote that he still sees a path to a solution based on what the fiscal plan work group put together.
The group reached consensus or offered conceptual options on how to fill the nearly $1 billion budget gap the 50-50 plan would leave as well as ways to settle the PFD but did not produce specific policies that could easily translate to legislation, as was suggested would happen when the group started meeting in early July.
“I believe if those eight (in the fiscal plan group) were a body, they would’ve produced a product that could’ve gone to the governor’s desk. If those diametrically opposed eight legislators can get there, then by golly the rest of the Legislature can get there,” Micciche said.
The work group had two members from each caucus of the Legislature, selected in part for their divergent philosophies regarding Alaska’s fiscal policy, according to legislative leaders.
More lawmakers are now willing to invite tough votes than in the prior years of Alaska’s near-decade run of deficits simply due to the “evolution of the frustration of inaction,” according to Micciche, who said many legislators need to accept that they need vote for one thing on the expectation of another.
“These issues need to be transparently discussed and available for people to process,” he said. “If the votes aren’t there, we need to work together but that’s not going to happen when all of the process is stymied by those who fear the outcome. I don’t fear the outcome.”
House Republicans again voted against a CBR draw, which was once again partially tied to oil tax credit payments. HB 3003 sought to fund the $114 million minimum statutory oil and gas tax credit payment with $54 million from the General Fund and $60 million from the CBR.
An initial $114 million tax credit appropriation died with the first failed CBR vote in late June. Paying off the tax credits, of which the state owes more than $700 million, has long been a priority of most Republican legislators.
Elwood Brehmer can be reached at [email protected].