Senate ups dividend to $3,000 during floor vote then fails to pass it

Sen. Bert Stedman discusses the operating budget on May 1, 2019. As the co-chair of the Senate Finance Committee, Stedman introduced a bill that would split the PFD from the budget. It ultimately lost his support once it was upped to $3,000. (Photo by Alaska Senate Majority/Flickr)

The dream of a $3,000 dividend was alive for about an hour on the Senate floor today.

Legislation that would split the dividend out of the operating budget arrived on the Senate floor today, a day after it was introduced with a $1,600 dividend. The Senate pulled together 10 votes to up the payout to the $3,000 via amendment, but those same 10 votes fell one short of the 11 needed to pass the bill.

The Senate was without Sens. Tom Begich and Mike Shower, who both had work-related excused absences. Shower, who’s been a vocal supporter of a full PFD, is expected to return to Juneau on Friday.

The Senate could then either rescind its action and bring the bill back up for a new vote.

Supporters of the full dividend included Sens. Bill Wielechowski, David Wilson, Mia Costello, Elvi Gray-Jackson, Lyman Hoffman, Shelley Hughes, Scott Kawasaki, Peter Micciche, Donny Olson and Lora Reinbold.

The group generally argued that the dividends belonged to the people, that the cash payouts should take a higher priority than all other government functions, that the annual checks boost the economy and reduce obesity, that the money would restore trust in government and that the citizens know better how to spend the money than “greedy politicians.”

Juneau Sen. Jesse Kiehl was the sole Democrat to argue against the increased dividend, arguing that the divisive anti-government attitudes ignored the good work that government does for its citizens. He acknowledged his colleagues’ argument that a PFD cut amounts to a regressive tax, but argued that cuts to schools, health care and the university would hurt the poor far more in the long run than a smaller check.

“In doing that we sometimes get called, as some of us were today on this floor, ‘greedy politicians.’ Well, if fixing those earthquake-damaged schools in District G makes us greed politicians, count me in. If the state’s share of fixing those earthquake-damaged roads up in the Mat-Su Valley makes us greedy politicians, count me in. I’ll wear that hat,” he said. “I think it’s unfortunate that phrases like that get thrown around or that some members have chosen today to somehow differentiate Alaskans from government. We work for the people. What the government spends, we spend for the benefit of all Alaskans.”

Sen. Bert Stedman, the Sitka Republican who co-chairs the Senate Finance Committee, had initially proposed the bill as a compromise to bring the special session to an end. The boost to $3,000, which would cost the state nearly $900 million more than the $1,600 dividend, lost his support.

The additional money for the dividend would come out of the Alaska Permanent Fund’s earnings reserve account, which Stedman said would already break the spending rules the Legislature set for the account in last year’s session. He said the when it comes to the conflicting laws, he would side with whatever ensures the dividend remains for the long haul.

“We’re fastly coming to a screeching halt of easy courses of action like we had in the last several years of taking it out of our main savings account and ignoring the fiscal issues in front of us,” he said. “The fiscal wall is about the length of our nose from our face … the easiest course of action is a simple majority vote to just take it from our descendants. … We can spend it and they can read about it in the history books.”

Even many of the supporters acknowledged that the historical formula for dividends isn’t sustainable. They said the public should be included in conversations to alter the formula but didn’t discuss what would happen if voters stood by the large payouts.

“The reality is a full dividend is not sustainable forever,” said Micciche.

Gov. Michael J. Dunleavy’s administration has indicated that taxes will be needed in the future, but with proposals that would make it near impossible for taxes to be passed it’s unclear when that future may be.

Sen. Click Bishop, R-Fairbanks, also seemed to be skeptical of his colleague’s calls to revisit the PFD formula at some point in the future. He said the Legislature has been kicking the can down the road since the downturn in oil prices, burning through $12 billion in savings. He said he’s worried that the same will happen to the money in the Alaska Permanent Fund’s earnings reserve account.

“I want to make sure that the people have a dividend now and into the future,” he said, “and I ain’t going to be part and parcel of walking through $19 billion.”

Rescinding action

The Legislature’s uniform rules allow any member to call for a previous vote to be rescinded, allowing it to be reopened for a motion. The vote requires the same number of votes for that motion to have passed, which in this case would be 11.

It could be difficult for the Senate to wrangle the necessary votes this week.

The pro-$3,000 PFD Shower is expected to return from his excused absence on Friday, but one of the original 10 is expected to be gone by then. The Anchorage Daily News Notes that Sen. Mia Costello, R-Anchorage, has an excused absence that would put her out of the city—and therefore unable to vote—on that day. (The preceding reference has since been removed from the ADN story.)

The other senator with an excused absence Sen. Tom Begich is expected to be back in Juneau on Saturday night. His position on the dividend is less set-in-stone. He told the Anchorage Daily News that, “I think right now, I guess my answer would be if (a traditional dividend is) what the majorities are moving toward, I’d be inclined to support it. But I’m also open to $1,600.”

The Legislature’s uniform rules, however, only allow a single effort to rescind a motion. If the motion to rescind fails or is strategically brought up ahead of time, it can never be brought up again.

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3 Comments on "Senate ups dividend to $3,000 during floor vote then fails to pass it"

  1. Laurie Keele | June 5, 2019 at 11:47 am | Reply

    Income or sales tax I am not new to AK 30 yrs this is total nonsense hitting the dividend or property tax only hits Alaskans. There are many tourists and out of state out of country workers who should share the load. Not to mention oil is not paying their share. STOP the BS EVERYONE who works or plays here should pay as well as those who rape our land take our resources and ruin out land. They need to pay too!

  2. Bill Campbell | June 5, 2019 at 1:04 pm | Reply

    There’s an error in the article.
    “The Anchorage Daily News Notes that Sen. Mia Costello, R-Anchorage, has an excused absence that would put her out of the city—and therefore unable to vote—on that day.”

    The article linked does not say anything about an absence for Mia Costello on Friday. Is there another article that mentions it?

    • Matt Buxton | June 5, 2019 at 3:04 pm | Reply

      Interesting. That was in an earlier version of the ADN story, but it’s since been removed. I’ll take out that reference.

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