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Legislators had yet to return to Juneau for the start of this year’s fourth special session and we all already knew it was unlikely to produce any meaningful progress to resolving the state’s fiscal woes or to paying out the large dividend that Gov. Mike Dunleavy and his allies have staked their political hopes upon. With less than a week left on the clock, it seems to have played out just as expected.
Save for a handful of hearings by the underappreciated House Ways and Means Committee, the special session has done little except wear out what little patience remains in the Legislature, run up per diem payments and drive a wedge between the already-related-in-name-only moderate and far-right Republicans.
Gone is any semblance of cooperation among the Legislature’s Republican majority as its conservative members—who pushed for a non-binding caucus—gripe about being able to bend the will of the moderate senators who control the Senate Finance Committee. Gov. Mike Dunleavy issued a statement today whining for the umpteenth time about the Legislature not paying out a bigger dividend.
“If the Legislature is unwilling to make the Permanent Fund Dividend whole, Legislators could, at least, make a decision to pay a supplemental PFD under the formula in my 50-50 Fiscal Plan,” he said as if the extended regular session and three special sessions haven’t already provided an answer to the question.
Dunleavy’s refusal to take a more active role in the solution’s to the state’s fiscal woes beyond the demand of large dividends has been, is and will continue to be the single biggest hurdle to paying out larger dividends. Without certainty that the dividends won’t either drive wild overspending of state savings, back-breaking taxes or soul-sucking cuts to state services, there’s simply not the votes for the dividend.
House Ways and Means Committee chair Rep. Ivy Spohnholz has been consistent in saying that she and most of the House Majority Coalition support “the largest dividend that we can afford.” That’s either the smaller dividend that has been paid out under the status quo or a larger one if it comes with new revenues or realistic cuts.
“Even with a brightening financial outlook associated with the temporary increase in oil prices … the only way to pay historically large dividends is to enact large new taxes or to make deep spending cuts. Legislative Finance confirmed that the ’50-50 plan’—which spends an equal amount on dividends as we invest in teachers, troopers, and transportation—would only pencil out if we come up with $1.142 billion in cuts or taxes in FY23,” she said in a prepared statement discussing the work of the committee during the special session. “Overall, the recent work of the House Ways and Means Committee provided a clear-eyed look at the options lawmakers have placed on the table to solve Alaska’s budget deficit, and the series of hearings laid a strong foundation for progress next year.”
Privately, several Republicans have complained that Dunleavy has done little but confuse the issue of the state’s financial woes with his singular focus on the dividend (see also: his reelection chances) and in doing so is driving legislators further apart on any potential solution, which was ostensibly the goal of the special session in the first place. His refusal to stand by any meaningful new revenue is the biggest source of heartburn for folks looking for an all-in resolution, which seems to be slipping farther and farther out of reach with his continued fiscal fantasy that no significant changes are needed to enshrine a large PFD in the state’s budget.
While the House Ways and Means Committee has considered plans that would balance the books with the taxes needed to help pay out larger dividends without deep, unrealistic cuts (the sort of concrete steps you’d need to take to reach a resolution), it hasn’t stopped many of Dunleavy’s allies from clinging to the fiscal fantasy that large dividends can be paid out painlessly—a point that the governor has continued to reinforce with a state-funded “informational” campaign—and ignoring the hard work that it would take to reach that conclusion.
Instead, you have maneuvers like the one put forward by a group of six Republican senators who, according to a report by KTOO, are demanding that the Senate Finance Committee give up on the legislative process and just advance forward the supplemental PFD that Dunleavy has been promising everyone.
“We saw a window of opportunity beginning to slam shut,” Senate Majority Leader Shelley Hughes said of the letter signed by fellow True Conservatives Mia Costello, Roger Holland, Robert Myers, Lora Reinbold and Mike Shower. “And we felt like maybe we could pry it open.”
The letter on its own is not all that surprising. This is a crew that has been consistent in its insistence that a big PFD is easy, but it’s still quite remarkable to have the Senate Majority Leader in Hughes and the Senate Majority Whip in Costello whining about a process that they are quite literally supposed to be in control of. While pointing to the Senate’s refusal to move the bills through the normal process may play well on Facebook, it doesn’t do anything to actually advance a deal or ease already high tensions.
After all it takes just 11 votes on the Senate floor to move a bill out of committee, the same that would be required to pass it. In the old adage of the Legislature: If you have the votes, vote. If you don’t, talk.
And this increasingly sour infighting—which has been marked with public accusations of some members being RINOs (Republicans in name only) or not True Conservatives—seems to be the only significant outcome of this special session that a Republican governor has called. Interesting play heading into an election year, huh?
It’s left several wondering whether Dunleavy is intentionally throwing a wrench in things in service of his own reelection bid—akin to former President Trump’s insistence that “I alone can fix it”—or all of this is simply continuing down the bumbling path that has largely defined an ineffectual term in the Senate and middling, even by conservative standards, time as governor. Is he playing 4D chess or is he just living to get through the day?
Folks seem to generally think the latter. Either way, it’s not moving the needle.