After Senate comes up short on PFD, Edgmon says it’s time to pass the budget

House Speaker Bryce Edgmon during a floor session on May 3, 2019. (Photo by Alaska House Majority press)

As “fun” as the Senate’s debate over the dividend were on Tuesday, it got the Legislature no closer to passing a budget and averting a government shutdown.

Senate Bill 1002 had been designed to separate the politically charged dividend from the operating budget, which has not seen any new progress since mid-May even though negotiations on the spending bill are nearly complete.

The budget hasn’t moved because of internal division in the Senate over the dividend. The Senate mustered 10 votes to up the dividend to $3,000 but needed 11 to pass the bill. The 11th vote would be Sen. Mike Shower, a Wasilla Republican who had an excused absence because he had to return to work as a FedEx pilot, but it’s not entirely clear whether his return later this week will change things.

With the uncertainty and dividend-driven division still strong in Juneau, House Speaker Bryce Edgmon, I-Dillingham, said it’s time to pass the budget.

“Today’s vote in the Senate perfectly illustrates why an operating budget has not yet been enacted: debate over the amount of this year’s Permanent Fund Dividend is consuming the Legislature,” he said in a prepared statement. “This is why we believe the Legislature should first pass a responsible budget to provide students, elders, and business leaders certainty in the critical services they rely on. Then we can focus on the many important questions surrounding the future of the Permanent Fund.”

Edgmon has argued in favor of setting aside the dividend for a separate battle, which would likely take the shape of a second special session in a new location. Gov. Michael J. Dunleavy has promised to keep the pressure up on the Legislature for a $3,000 dividend, his key campaign promise, and has threatened vetoes and special sessions if anything less than that is sent over.

It’s unclear what he’d do if a budget without a dividend was sent to his desk.

During a Facebook town hall last week, the governor said the following when asked whether he’d veto a PFD-less budget: “We are adamant that the laws be followed pertaining to the permanent fund, and we’ll keep insisting upon that.”

Potential fallout

Failure to sign a budget into law by July 1, the start of the next fiscal year, would force a state government shutdown resulting in furloughs or costly layoffs for thousands of state employees as well as disruptions in services in everything from Alaska’s fisheries to parks and road maintenance.

The lack of a budget will begin to cause problems as early as next week for health care providers—from big hospitals to small providers—that take Medicaid. The state quietly announced last week that its Medicaid program is running out of money and without an infusion of cash will cut off payments to all providers for the final three weeks of June.

The passage of a budget also would potentially put distance between the state’s operating budget and a PFD-driven veto. Dunleavy has frequently threatened the Legislature with vetoes, a power that he could bring down on the budget regardless of the size of a PFD. By passing a budget ahead of the PFD, it would give the Legislature an opportunity to potentially override the PFD while giving legislators a clearer picture of the state’s financial picture.

Much of the opposition to a supersized dividend is its impact on the outlook of the state’s finances.

‘We have time’

While the House has generally been settled on both the operating budget and a dividend—set at $1,6000—and is ready to get on with things, the Senate doesn’t appear to be in the same hurry.

Sen. Bert Stedman, the Sitka Republican who co-chairs the Senate Finance Committee and authored Senate Bill 1002, told reporters after the vote that he thought the Senate could still reach a deal in the remaining days of the special session.

“We have discussion amongst ourselves. We have almost two weeks, a week and a half. We have time,” Stedman said, according to the Juneau Empire. “It won’t be a unanimous decision.”

The session is set to expire on June 14. Gov. Dunleavy said he would begin the process of notifying state employees of potential layoffs if the Legislature hasn’t passed a budget by then.

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3 Comments on "After Senate comes up short on PFD, Edgmon says it’s time to pass the budget"

  1. So this article clarifies the situation a little better. The argument over the $3000 dividend is based on Dunleavy’s irresponsible campaign promise.
    It was a cheap ploy to get elected, IMO, and he seems willing to act fiscally irresponsible in order to make it come true.
    Shut down the government while thousands of the most vulnerable Alaskan’s suffer. All to carry out a political stunt.
    I guess we are supposed to be impressed.

  2. Paul Lincoln | June 6, 2019 at 7:24 am | Reply

    Governor Dunleavy had an responsibility to restore the trust garnished by than Governor Walker, when taking one thousand dollars from the dividend, and one legislature made it worse, introducing another bill, and/also taking one thousand dollars from PFD.

    I never did like the politicians in the State of Alaska, because they were introducing bills that were wasteful in terms of “long term goal,” rather than looking at the future generation that needed to be protected.

    I would encourage the State Government .

    Interrupted by Security Guard at the ANMC>

  3. I would like the legislature to set a rule of trust by refusing to break the standing rules for the PFD. My parents voted for this law put forth by Jay Hammond ! He was fully aware of the greed and incompetence that the oil revenues would cause with politicians trying to use all oil money to run the state! Therefore they could collect there pay, perform, perks, extra pay for doing nothing and basically use every cent from the oil revenues! The land and the natural resources within that land belong to every citizen of Alaska! That is why the PFD was set up——so no matter how inept, greedy and spineless the future politicians would be——the citizens who own the resources would be protected from lazy stealing politicians!
    Someone needs to figure out the loss of revenue for a family of six! Last year they paid 10,000$ in revenue. This year they will pay another 10,000$
    Over the next 10 years that family will have paid over 100,000 in actual lost income to pay to run the State of Alaska! Taking this much money away from legal owners without their input caused a war one time!
    This is worse—- they are stealing our children college fund, some people medical and prescription safety net, elders retirement and sole income at times! It takes a real low minded their to steal money from newborn babies to ancient elders!
    Thank God for Jay Hammond and my parents who could see how ruthless and self serving todays politicians have become!

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