Senate advances $1,000 PFD in ‘turducken’ budget

The Senate Finance Committee considers amendments on May 18, 2021.

With the session set to expire on Wednesday, the Senate Finance Committee brushed off the early 2010s Thanksgiving trend of cramming together various poultry and crammed the Alaska Permanent Fund dividend payment, the capital budget and a spending plan for the American Rescue Plan Act funding into the operating budget.

“I have named this bill the turducken. When you shove the operating budget, the capital budget and the PFD just like you shove a duck in a chicken in a turkey that’s what this bill is,” said Sen. Natasha von Imhof, R-Anchorage, while trying to lighten the mood as the bill advanced out of the committee. “It brings a smile to my face when we at least can find some levity in a 100-and-I-don’t-know-how-many-page bill—150-page bill.”

The jam-packed version of House Bill 69 represents an effort by the Senate to wrap up as many of the must-do items as possible as quickly as possible as the Legislature is expected to blow past the 121-day session limit on Wednesday. Gov. Mike Dunleavy has already ordered legislators to continue working on Thursday under the first of two 30-day special session declarations he has indicated he will call this year to address the state’s ongoing financial woes.

Senate Finance Committee co-chair Sen. Bert Stedman, R-Sitka, told the committee they’d give consideration to everyone’s ideas “as we race forward to the conclusion of this session over the next seven, eight, nine days.”

In the afternoon, the committee took up several amendments from members before advancing the bill to the floor for a vote tomorrow, where legislators will have another shot at offering amendments.

The first and most significant amendment was supported by all members and would transfer $4 billion (up from $2 billion) from the Alaska Permanent Fund’s easily spendable earnings reserve account to the constitutionally protected corpus of the fund. Stedman’s main focus in recent years has been to protect as much of the fund as possible as legislators start to look to it for overdraws in service of spending or dividends, such as has been suggested by Gov. Dunleavy and other supporters of the dividend.

As for the dividend itself, the Senate version of the budget is the first time the budget has contained any dividend after it approved an amendment for a $1,000 dividend today. Sen. von Imhof said she had concerns about nearly depleting the state’s savings but conceded that a dividend of some amount should be paid.

The committee rejected two attempts to pay higher dividend amounts (a $2,600 PFD equal to about 50% of the POMV draw and a $3,400 PFD according to the statutory formula). Sens. Bill Wielechowski, D-Anchorage, David Wilson, R-Wasilla, and Donny Olson, D-Golovin, supported the higher dividend amount, but Sen. Lyman Hoffman, a Bethel Democrat who supports a larger dividend, opposed the measures along with the committee’s other Republicans. He said that while he supports a larger PFD, he would oppose as long as there is no resolution on the dividend formula.

“In order for us to get there I believe the dividend should be no greater than $1,000,” he said.

Other amendments made clear just how much the senators, particularly Sen. Stedman, were relying on personal relationships to smooth over the sticking points as they attempt to hastily land the budget. Several proposed amendments by Sen. Olson to fund specific projects in his district–an upgrade to the Port of Nome and a replacement water tank for Diomede–were sidelined in anticipation of a federal infrastructure bill passing later this year with the guarantee from Stedman and co-chair Sen. Click Bishop, R-Fairbanks, that they cared about the projects and would prioritize it later this year.

There were others that strained relationships. Sen. Wielechowski saw support evaporate for his amendment that proposed to use America Rescue Plan Act money on a trail system connecting Fairbanks to Seward (a project supported by Dunleavy in another bill) after Sen. von Imhof suggested sidelining it for the federal infrastructure project. He said he was “deeply disappointed” in committee’s chairs–Bishop and Stedman–because they had already committed to supporting the project. Stedman didn’t deny the allegation but noted that Wielechowski had success on other amendments.

Some of those other amendments were a proposal to reduce the payout of oil tax credits from $114 million to $36 million. Wielechowski has fought the hefty payout of the credits, noting that the law says it’s at the discretion of the Legislature and shouldn’t be prioritized over the PFD. Stedman and others supported the change, noting that it would give them leeway in negotiations with the House, which had put the full $114 million in its budget.

Another amendment by Sen. Wielechowski that seeks to restore the $300 per week federal unemployment benefit that will be cut off three months early by the Dunleavy administration was introduced and withdrawn by Wielechowski during the hearing. Both he and Stedman indicated that they were working on a separate amendment that would give people incentives to return to work as an alternative response to the labor shortage in some areas of the state. That amendment, they said, would be offered during the floor debate on Wednesday.

Once the Senate passes the budget, it’s likely to head to a conference committee with the House to hash out the differences before it can be finalized and sent to the governor. The conference committee’s powers, however, are limited to a spending range between the levels set in each budget.

At the end of the amendment process, the Senate voted 5-2 to advance the legislation with minority Democratic Sens. Olson and Wielechowski voting against the measure.

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1 Comment on "Senate advances $1,000 PFD in ‘turducken’ budget"

  1. Patricia Beown | May 19, 2021 at 8:36 am | Reply

    Be realistic, you need to cut the budget. No wish list items, just the necessities this year. Everyone is hurting from the pandemic and from inflation brought on by Binden’s mess. Give us Alaska’s a brake in the madness! We need it and deserve it as well.

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