The Alaska Legislature has adjourned with big questions still hanging in the air, not the least of which is the issue of the permanent fund dividend. The House and Senate were scheduled to hold final floor sessions Tuesday morning but both were canceled, allowing the second special session to automatically end at midnight Wednesday.
What’s happening with the dividend?
Last month, the Legislature passed a bill that not only restored 80% of Gov. Mike Dunleavy’s operating budget vetoes, but also included a $1,600 PFD — a figure the governor has told reporters he won’t support.
That bill, and subsequent dividend amount, has yet to be transmitted to the governor’s desk where it will either be approved or sent back to the Legislature with vetoes or changes.
In order for the dividend to be distributed at its normal time in October, an amount must be approved by the end of August. However, according to Senate Rules Chair John Coghill, R-North Pole, if an amount is not approved by the end of the month, a dividend can still be distributed, it will just be late.
“What we found out is if it’s delayed and goes out later in the year, we just need to give the (Permanent Fund Dividend) Division five weeks notice,” Coghill said. “So it could be a delayed dividend. It could go out at $1,600; that’s what we sent to the governor and as far as we know, he hasn’t acted one way or the other.”
Coghill said unless Dunleavy vetoes the amount, the Permanent Fund Dividend Division is preparing to distribute a $1,600 dividend in October.
“But that’s a big if. Until the governor does something, it’s all speculation,” Coghill said.
“We don’t know what his move will be, but my guess is if it’s sent back to the Legislature for more work, it would be into November or December before it goes out.”
What about the university?
Last month the Legislature passed House Bill 2001 which seeks to restore $110 million in funding to the University of Alaska, leaving the institution with only a $25 million cut instead.
However, as much of the funding is still up in the air and the fiscal year as already begun, the UA Board of Regents declared financial exigency last month, allowing the administration to send layoff notices to tenured faculty and enact budget-reduction measures in a more immediate manner than they would be able to otherwise.
As discussed in a number of board meetings, should the funding be restored to the university, cost-cutting measures will look very different. However, as it stands currently, the university is beginning to look at consolidating the three separately accredited institutions in Anchorage, Fairbanks and Juneau into one single accredited university.
In an Aug. 5 video update, UA President Jim Johnsen said he and his team are beginning to make a plan for consolidation that will be presented to the board in September.
What’s the status of other funding in the operating budget?
House Bill 2001 not only includes a $1,600 dividend but also restores 80% of the $444 million in operating budget vetoes released by Dunleavy at the end of June.
As passed the bill would put back funding to areas of the budget such as Medicaid; the Senior Benefits Payment Program and adult dental programs; Alaska State Council on the Arts; public broadcasting; prekindergarten and early education programs; the Ocean Ranger program; community assistance grants; Alaska Legal Services; the Village Public Safety Officer program; and others.
“The add-backs to spending — to the tune of $400 million — are yet another attempt to blow up the size of government. I stand by the decisions made on June 28 and the focus we’ve made on providing a sustainable budget and sustainable systems,” Dunleavy said. “While we will consider a limited number of additions to the budget, we consider the vast majority of the FY20 budget final. It’s time to move forward.”
Where does the capital budget stand?
Last week the Legislature passed House Bill 2002 which seeks to fund the capital budget and approve the restoration of a group of subaccounts whose funds were swept into the Constitutional Budget Reserve on July 1, the beginning of the new fiscal year. These included funds for the Power Cost Equalization program, which seeks to mitigate higher energy costs for communities in rural Alaska, and the Alaska Higher Education Investment Fund, which supports the Alaska Performance Scholarship and other education grants.
In a discussion with reporters last week, Dunleavy noted his appreciation that the Legislature passed the capital budget last week but said he and his team will be reviewing the bill and would not confirm whether or not he would veto certain items.
“While I intend to sign SB 2002, I will exercise my line-item veto authority where necessary,” Dunleavy said.
The capital budget was transmitted to the governor last Wednesday. There has been no word on when the governor may act on the bill or return it to the Legislature with vetoes. The bill is due back from the governor by Aug. 17.
Coghill told the Daily News-Miner on Tuesday afternoon that even with the Legislature completing their work, there are still a lot of “ifs” in the mix.
“We left it open last week, we didn’t adjourn then, we wanted to see if the governor had to say about the bills,” Coghill said. “If he did something by Saturday or Sunday, we might have been able to come in and finish something up but he chose not to.”
House and Senate leadership sent a letter to Dunleavy last week urging him to call a third special session to allow for legislative discussions regarding the future of the Alaska Permanent Fund Earnings Reserve and subsequent annual dividend.
Several legislators on both sides of the aisle have expressed an interest in ironing out a new dividend formula to avoid the divisive topic of the dividend cropping up each session.
Dunleavy released a response letter Tuesday evening he sent to House and Senate leadership Monday.
“At this time, I am weighing all options available for my Administration to continue the dialogue and work with the legislature on these matters,” the letter reads. “I appreciate your feedback and your desire to work collaboratively and engage, in the broadest possible manner, Alaskans in the deliberations on these issues.”
The governor said Tuesday he does not plan to call the Legislature into an immediate third special session, according to Dunleavy spokesman Matt Shuckerow.
Contact staff writer Erin McGroarty at 459-7544. Follow her on Twitter: @FDNMPolitics.