The Legislature on Monday passed legislation that restores the vast majority of $444 million in vetoes delivered a month ago by Gov. Michael J. Dunleavy. It also pays a roughly $1,600 PFD.
The legislation passed the Senate on a 17-1 vote after a handful of last-minute amendments were made, including one that scaled the PFD down from $3,000 to $1,600. The legislation returned to the House in the afternoon where it was met with a caucus-line 23-15 vote where the lack of the $3,000 dividend still divided the chamber.
Earlier in the day, enough House minority Republicans did come together to successfully pass and fund the capital budget as well as restore dozens of program-specific funds that the Dunleavy administration had targeted for liquidation, including the state’s university scholarship, vaccination and power cost equalization funds.
The veto restoration bill replaces funding for a flurry of programs including: Senior Benefits, Ocean Rangers, homelessness services, legal services, the Alaska State Council on the Arts, adult dental benefits for Medicaid recipients and many others. The biggest single hit would land on the University of Alaska, which would see a roughly $26 million cut remain with $110 million restored.
Both bills face an uncertain future with the governor’s line-item veto power between them and enactment.
Dunleavy could still strip out any pieces of the veto restoration bill, any piece of the capital budget and could even potentially veto out the reverse sweep language that would reinstate all the funds that he targeted for liquidation. The reverse sweep language doesn’t individually list each program so it’s generally understood that the governor couldn’t pick and choose which funds are affected.
The Legislature opted not to end the special session on Monday even though it had passed most of the items on the governor’s special session agenda. There’s no set agenda for what the Legislature will do now, but there was a fair amount of talk about continuing work on the future of the dividend.
No $3,000 PFD… yet
The Senate was resolute that it would reduce the dividend from $3,000 to $1,600, but there does appear to be a plan formulating about reaching a $3,000 dividend this year in return for pushing ahead with changes—or, really, reductions—for future dividends.
Such a plan has been floated in the media, and on Monday, Sen. David Wilson, R-Wasilla, offered an amendment that would allow the state to pay a supplemental $1,400 dividend at some point in the year while allowing the Legislature to address the formula.
The amendment, however, didn’t attach any strings to the supplemental payment and would have allowed the administration to pay out the additional money without waiting for the Legislature to make such a change. It was defeated on an 11N-9Y margin.
The dividend amount wasn’t the only piece changed on the Senate floor. The chamber also passed a handful of amendments that restored additional funding to the bill.
The chamber also approved amendments that restored the full funding for the school bond debt reimbursement program and funding for Rural Education Attendance Areas. The House had opted to let partial vetoes of both stand in the name of growing the dividend but would have shifted costs to local municipalities and potentially resulted in local property tax increases.
The amendments specifically added nearly $50 million for the school bond debt reimbursement program to fully meet the state’s obligation to local districts to should part of the costs from school construction and major renovation projects. There’s $20 million for REAAs restored in the bill.
In a notable move, many members including Senate President Cathy Giessel joined on as a co-sponsor of the two education-related amendments. Typically minority-fielded amendments
Additionally, the Senate had also added $100,000 for veterans’ services.
The House had added $5 million for the operations of the Alaska Marine Highway System in order to soften the cuts to the system’s sailing schedule, which as currently planned would leave some communities without service for months.