Legislature's Budget Heads to Governor's Desk With No Action on PFD
By MARY KAUFFMAN
June 11, 2019
Governor Michael Dunleavy posted a written comment Monday on FaceBook regarding the Legislature's budget: "In the coming days, I will review and scrutinize the budget passed by the Legislature and determine the best path forward, including options to accept the budget as passed, to veto the budget in its entirety, or to veto portions of the budget to better align expenditures and revenues. I am absolutely determined to address the budget issues that have haunted Alaska for years."
The budget provides $4.4 billion in unrestricted general funds for agency and statewide operations – a reduction of $190 million over last year – and transfers $10.5 billion from the Permanent Fund’s earnings reserve account into the fund’s constitutionally protected principal.
“This budget delivers real reductions, keeps Alaskans safe and protects the Permanent Fund for our descendants,” said Senator Bert Stedman (R-Sitka), co-chair of the Senate Finance Committee.
Stedman said, “Today [Monday] we made the largest ever transfer to the Permanent Fund’s constitutionally protected principal in history. Within 15 years, we can expect the fund’s principal to be about $100 billion.”
Currently $19 billion of Alaska’s $65.3 billion Permanent Fund sits in an earnings reserve account that can be spent by the Legislature with a simple majority vote. To protect these funds, the Legislature’s proposed budget moves over $10.5 billion from the earnings reserve into the constitutionally protected corpus, which cannot be accessed without amending the state’s constitution. This does not affect the ability of the fund to pay dividends, according to a Senate Majority news release.
“The people of Alaska sent us here to make the hard decisions for the long-term benefit of all Alaskans,” said Senator Natasha von Imhof (R-Anchorage), co-chair of the Senate Finance Committee.
“Today [Monday] locked away more than $10 billion into the Permanent Fund’s principal, taking more than half the earnings off the table, forcing all state spending to be in line with our annual revenues and protecting our savings accounts for emergencies,” said von Imhof.
Senate Democratic Leader Tom Begich (D-Anchorage) issued the following statement Monday: “It is important that we pass the operating budget to prevent disruption in government services for all Alaskans. This is a budget that works for Alaska within our current fiscal climate, and I am pleased to support it."
Begich said, “We realize the amount of the Dividend prevented the passage of the budget, and the best way to finalize the Dividend is through a special session solely devoted to the matter. But ultimately, the Dividend must be protected through a constitutional amendment. Until then, the legislature will continue to debate its size, preventing us from concluding our work on behalf of Alaskans.”
The Legislature’s proposed budget is the smallest since fiscal year 2005, adjusted for inflation and population.
“This budget is good for Alaska’s families and businesses,” said Senate President Cathy Giessel (R-Anchorage). “Government spending has been reversed by 15 years – that’s a significant achievement, one that we can all be proud of.”
As of Monday afternoon, the bill was on its way to Governor Mike Dunleavy’s desk for his signature.
Sunday, with just a few days left in the first special session, the Alaska House Majority Coalition passed the House's budget which was then sent to the Alaska Senate for concurrence with the changes to the operating budget made by the conference committee. However, according to the House Minority members(Republicans), that budget was bloated and without an answer to one of the most pressing questions: the Permanent Fund Dividend.
Sunday, in a vote along caucus lines (with Anchorage Rep. Gabrielle LeDoux voting alongside the House Republicans), the Alaska House Minority said the operating budget was forced through alongside a larger-than-necessary transfer of funds from the Permanent Fund’s Earnings Reserve Account (ERA), in order to pay for the extra layers of government spending that the leaders of the budget conference committee refused to cut from the budget.
Quoting a news release from the House Minority, the Alaska House Majority also voted to pass House Concurrent Resolution 101 – despite it not carrying a clear tie to the purpose of the first special session – attempting to defer conversation on the Permanent Fund Dividend to a later date – presumably in hopes of avoiding the conversation and the required payment of a dividend altogether.
“What we have seen today [Sunday] is an attempt to avoid answering the toughest questions facing Alaskans,” said House Minority Leader Lance Pruitt (R-Anchorage). “At this point, it is clear that the House Majority is completely unwilling to have the tough, voter-mandated conversations, and plans to dictate to the people what will happen with the PFD, regardless of what the law says.”
“This lack of leadership on these issues should be unacceptable to Alaskans,” added Rep. Cathy Tilton (R-Chugiak/Mat-Su), and member of the budget conference committee. “We have a legal obligation to pay a dividend and do as the law says. We cannot just pick and choose which laws we want to follow and which ones we wish to ignore.”
House Bill 39 passed the Senate 20-0 on Monday and the House 22-15 on Sunday, for a combined vote of 42-15. The bill will not become law until signed by the Governor.
The governor's proclamation calling the Alaska Legislature into special session on May 16, 2019 directed the legislature to work on five items:
There are five days left in the Special Session. The Legislature in the 2019 Special Session costs Alaskans roughly $30,000 every day.
In Case You Missed It:
Governor Michael Dunleavy hosted a Rally to Restore the PFD on June 6th at the Mat-Su Valley Resort in Wasilla.
On the Web:
Source of News: