Following the Legislature’s under-the-wire finalization of a $1,100 PFD today, all eyes were on Gov. Mike Dunleavy who had already vetoed the same-size dividend early this year in a bid to finally deliver on his promise of big PFDs as he headed into his re-election campaign.
Would he veto it again, sending it back to a Legislature that responded to the first veto by passing the same dividend and potentially risk ending up with a $0 PFD? Turns out we didn’t have to wait long to find out.
In a statement released this evening, just hours after the Senate approved the $1,100 PFD and effectively brought a close to the special session, Dunleavy announced that he will not veto the dividend—even though he said he would like to do so. Instead, he’s announced a fourth 30-day special session to “get the rest.”
“On one hand, a veto of this half measure would seem appropriate, but at this stage of the game that would aid and abet those that don’t care about individual Alaskans, small businesses and the economy,” he said. “As a result, I will not veto this partial PFD, but will call the legislature back into session October 1 to get the rest of this year’s PFD and to solve the state’s financial problems with a complete fiscal plan.”
The governor and his allies have long pushed for a payout according to the statutory formula, a figure that has long been ignored following the collapse of the state’s oil revenue and legislators diverted funds to balance the state budget. Dunleavy made the issue his core campaign promise in 2018, pledging not only to pay out big dividends but to repay past ones. His promises have run into a Legislature that’s fatigued by years of deep, continual cuts to state government and aware the budget would balance in near-perpetuity if the dividend is kept to a minimal amount.
Now, though, interest has picked up for paying larger dividends as well as interest in paying for them. Most progressives and several Republicans have conceded that new taxes would be necessary to make the books balance, but Dunleavy and a majority of the Republicans have continued to reject new taxes and have clung to claims that the government can still be cut despite such cuts fueling a recall effort against the governor. They claim that the strong investment returns of the Alaska Permanent Fund over the last year warrant overspending the account by several billion dollars while others have raised concern about what it would to the long-term health of the investment fund.
His special session call is ostensibly an effort to continue that, but most efforts lately have been snarled as Republicans dig in against taxes on the wealthy or the oil industry. Some have demanded that constitutional guarantees for a dividend and a strict constitutional spending limit must advance first, while others have outright been opposed to raising taxes to pay for direct cash payouts.
The announcement references a $1,100 PFD. It’s a figure that leading up to the vote, Dunleavy had claimed was wrong because of a dispute over the funding sources. The Legislature’s budget calls for the funding equivalent to about $600 of the PFD to be drawn from the state’s surplus and the remaining to come out of the Statutory Budget Reserve. The SBR is typically swept into another state savings account but was specifically referenced in a court order as one that would be still available to spend.
The status of the funding was an issue during today’s debate in the Senate and Senate Finance Committee co-chair Sen. Bert Stedman said he believed the Legislature had the correct reading of the law, but said a lawsuit may be required if the governor pursues plans to sweep the fund. Perhaps he’s not willing to pick what is almost certainly a losing fight.
Will it work?
Isn’t doing the same thing over and over and expecting different results the definition of something?
Ah, right, Alaska politics.