After hours of public testimony that was largely in support of a larger PFD, the House Finance Committee approved a $1,100 PFD on Tuesday night with little fight from pro-PFD legislators.
The committee voted 7-4 to amend the budget bill introduced by Gov. Mike Dunleavy in a vote that lacked any of the pushback that dividend-focused legislators have normally put up. Instead, only the amendment’s sponsor, Rep. Adam Wool, and Rep. Andy Josephson spoke on the change.
“There’s certainly a lot to talk about if needed but if not that’s fine,” Wool said before the committee held the vote on the measure.
The $1,100 dividend amount is less than half of what Gov. Dunleavy and his allies have been pushing for but doesn’t require the state to break its spending limit on the Alaska Permanent Fund. It’s the same amount that was approved by the Legislature earlier this, though half the money was withheld due to a failed budget vote (though a later court ruling found it was probably available to be spent anyways).
“The governor vetoed it and then submitted the new bill,” Wool said, “but this brings us back to the bill that passed the House and the Senate. It’s an amount that won’t require an overdraw, which I think is really the main point and I believe that’s where that number of $1,100 came up. It would not require an overdraw.”
The four members who voted against the amendment—Reps. Neal Foster, Ben Carpenter, DeLena Johnson and Sara Rasmussen—did not speak about their opposition or reference the hours of public testimony in support of the measure.
On a subsequent amendment that removed other language related to the overdraw, Carpenter said “I think it’s just a waste of our time.”
Earlier in the meeting, Carpenter also advocated for spending more than $700 million from the Alaska Permanent Fund’s investment income on payments to oil companies to settle the now-defunct tax credits paid out under the state’s former oil tax structure. His proposal was rejected and the committee ultimately approved the minimum payment of $114 million. The committee also approved a $400,000 payment to the Alaska Legal Services Corporation, an organization that provides legal assistance to low-income Alaskans to deal with things like domestic violence cases and others. Carpenter voted against that amendment, arguing that the real way to help poor people was to pay all Alaskans a $2,350 PFD.
The House Finance Committee is set to meet again today to consider the final amendments with the House expected to take a vote on the measure as soon as Thursday.
To overdraw or to not overdraw, that is the question
Whether or not the state will break the spending limit set on the Alaska Permanent Fund’s investment revenue has been the key battle this year. While Dunleavy and his allies have pointed to strong returns as reason to dip into the account, the majority of the Legislature has so far opposed such overspending.
This special session, however, the Alaska House Majority leadership has signaled that it may be open to overspending as long as it’s paired with a balanced approach to the state’s financial situation that would include new revenues, moderate cuts and a slate of other changes. Dunleavy, however, has refused to consider new broad-based taxes and his administration’s promises of introducing other revenue measures—such as oil tax changes and legalized gambling—have not materialized.
Even a promised tool that would allow Alaskans to put together their own fiscal plan has yet to be published. It was promised to be released ahead of the special session.
Instead, Dunleavy has largely retreated to drumming up public support for the PFD in an attempt to pressure legislators that looks at lot more like campaigning than it does legislating. In several hearings of the Senate Finance Committee this week, legislators have lambasted the Dunleavy administration for yanking the Legislature around when it comes to revenue.
“The administration has got to stop sending us mixed messages. We’re either going to be able to raise revenue or not raise revenue,” said Sen. Click Bishop, R-Anchorage. “This all could be a fairy tale if the governor is still requiring a vote of the people on taxes.”
Bishop later added that he’s steadfastly opposed to an overdraw, which the governor has described as a “bridge” even though the funding seems to be solely intended on paying out two large dividends ahead of the 2022 election, without a plan.
“I’m not interested in bridge funding the earnings reserve to a goose egg,” he said. “I’m not doing it.”