Budget error will make full dividend harder to attain, but also makes legislative per diem harder to restore - Must Read Alaska
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Saturday, September 18, 2021
HomePoliticsBudget error will make full dividend harder to attain, but also makes legislative per diem harder to restore

Budget error will make full dividend harder to attain, but also makes legislative per diem harder to restore

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Gov. Mike Dunleavy vetoed the $525 Permanent Fund dividend, and in his announcement on Friday he surprised lawmakers by vetoing their per diem.

To get their per diem back, they’ll need to restore a set Permanent Fund dividend calculation. Or they can face the wrath of voters next year.

But then something happened. A budgeting error from the Governor’s Office gives legislators a $4 billion bit of extra worry and another reason to argue over and shortchange the dividend.

The governor intended to veto a $4 billion transfer the Legislature had made to the principle of the Permanent Fund, but there was a scrivener’s error on the budget — somebody blew it in the final, admittedly hastily reviewed budget that the governor had only hours to review and sign.

Some lawmakers don’t want to allow that scrivener’s error to be reversed, and so a $4 billion appropriation to the corpus of the Permanent Fund is squirreled away, off limits to solve fiscal problems, and not usable to pay a dividend or government expenses this year. Anti-dividend lawmakers are overjoyed with the oversight.

Without that veto, it makes it a lot harder for the Legislature to fulfill its promise to come up with a long-term solution for the budget in August.

Make no mistake, even after the $4 billion transfer, there is almost $20 billion available in the Earnings Reserve Account. That balance is more than sufficient for any fiduciary responsibility to keep adequate reserves in place. It does serve the narrative of the anti-PFDers, who have put almost $9 billion into the corpus in the last two years, and said they don’t have money for full dividends.

The liberals are probably going to look at taxes, and blame will go both directions.

The chances of a constitutional amendment to protect the dividend are increasingly more difficult as Democrat election politics start gearing up and Democrats look for ways to hit Dunleavy with some body blows before he stands for reelection.

Not allowing the $4 billion to fall back into the General Fund will, however, also make it difficult for them to explain their $300 per diem, vs. Alaskans’ $525 Permanent Fund dividend.

Read the actual per diem that each lawmaker received last year at this link

Some in the Legislature kept a social media silence about the cut to per diem. Others hopped on their social media accounts and complained loudly on Friday. For some, the per diem is a handsome benefit, while for others, it barely covers their cost of having to have a place to live in Juneau.

But it also serves as a reward for not getting work done. And a few legislators use their time unwisely in Juneau, partying excessively on that per diem.

Starting Jan, 19, 2021, the Legislature was in session for the 90 statutory days. Not able to get its work done in the law-specified timeframe, legislators blew through the deadline and stayed until the 121st day, a constitutional limit. That is something they do year after year, rewarded by per diem for every day they stay in session.

They still could not provide a budget.

The Legislature went another 30 days of special session, and toward the end, lawmakers still could not come up with a legal budget, because it didn’t have an appropriate effective date. Some legislators argued that it didn’t need one, but they finally made the budget legal and the government did not shut down.

They handed the governor an error-ridden budget at the 11th hour. He and his team had just hours to look it over and send back errors they found to the Legislative Finance Office, allowing the Legislature to get its errors corrected. In the end, it was his own team’s oversight that led to a $4 billion lock-up of funds into the Permanent Fund. The Legislature is saying, “Thanks for letting us correct our budget errors, but also “No do-overs” to the governor.

All that time in Juneau, the per diem racked up. The total a legislator could have made in per diem so far this year? It’s north of $45,300, untaxable.

That’s in addition to the $50,000 taxable income they earn as salaries for being legislators. According to the House’s estimate, the per diem for this fiscal year will total $2 million.

Few Alaskans realize that legislators get rewarded for not doing their work in the time allowed by law.

Read Legislators received up to $8,700 in per diem for special session

Particularly awkward is that legislators have changed their per diem laws three times in 15 years, and most recently passed a law that said they could not get per diem after the session ended if they had not passed a budget on time. They just ignore that law an award themselves the money retroactively.

Gov. Dunleavy has given the Legislature the opportunity to get it right in August. They can override some or all of his vetoes, they can even restore their own per diem with an override. But the $4 billion that just went into the corpus of the Permanent Fund? That is a five percent gain for the Fund, and is going to make August extremely difficult.

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Suzanne Downing had careers in business and journalism before serving as the Director of Faith and Community-based Initiatives for Florida Gov. Jeb Bush and returning to Alaska to serve as speechwriter for Gov. Sean Parnell. Born on the Oregon coast, she moved to Alaska in 1969.

Latest comments

  • As I was reading through the per diem breakdown it struck me that the majority of names on this list have been in politics if not in Juneau since I have been in Alaska (1995). We are not supposed to have a ruling class. Time to pull the flush handle on all of em.

    • Prop 2 removed the flush handle and made it a crime to even attempt to clean anything up. The RINO+communists alliance will rule permanently, backed by Dominion and the Democrat Supreme Court

      • Reading this article makes my head spin and my heart pound. Will we get a PFD at all this year? Will the legislators now reward themselves for a job well done and a fat per diem check? It is SICK!

        • It’s almost certain that we will get NO PFD this year, thanks to Dunleavy’s stupidity. They need 3/4 of the legislature to agree to give a PFD, and there is definitely a good quarter of RINO/Communist legislators who would be more than willing to kill the PFD altogether

  • God, Dunleavy is stunningly inept. How do you overlook $4 billion? At this point I’m willing to believe he did it on purpose. Another version of the Wasilla cave.

    If he had vetoed the whole damn thing as he should have, the odds of this being an issue goes way the hell down.

    • Coming from you, not surprising.

      • Ah, another liberal joins the conversation. You must be happy now that the PFD is gone

  • No. Even though the 2022 budget is now signed into law the Legislature can still CUT THE BUDGET ENOUGH TO PAY THE PFD. (Anyone will have to show the arithmetic if they think otherwise.) Why is it that no one talks about cutting the budget? Did Moses bring the budget down from Denali or something? The Corrections budget has grown 600 percent over the past many years. Medicaid has added hundreds of millions of dollars in GF spending. And look – just look once if that is somehow all you can stand – at the BSA. The oil property taxes improperly diverted to the North Slope Borough alone amount to a $550 PFD! Again, anyone would have to show me the arithmetic before I can understand the premise here. By the way, the 2022 vetoes amount to 1.8 percent of the total 2022 spend, not even as much as the supplementals will be come next January. People call the fiscal gap an “existential crisis.” If you had an existential problem in your personal finances do you think you could find more than 1.8 percent to reduce your spending? Who thinks Alaska voters are this stupid? I favor putting the $4 billion in the corpus to earn income for all time, but it was an uncommonly stupid oversight to not include it – and very funny.

  • This just goes to show that they are above the law in every way.

  • Spin, twist, wiggle… is this beer-pong leg wrestling? Or just another round of lies from the legislative thieves? I should run for office just to get in on the fun. 🙁

  • No individual can be as incompetent as our elected officials can be as a group.

  • The Evil behind some of those legislators makes me angry.

  • Well, there goes this year’s PFD. Zero dollars for us peasants (there’s no way the Dems will play ball to fix this error)

  • Oh goody!! More fun with Dick and Jane.

  • Rewarding legislators with per diem for not accomplishing the budget task is very similar to rewarding K12 education with more and more money for failing our children. So, what’s the problem?

  • Here’s a thought, $60,000 flat rate salary, NO per diem & if they go over their 121 days NO pay whatsoever! NO special funding, no transfer to Per diem to “pay” them for overtime, Zip, Nada, nothing! I bet they’d figure a way to get their job done pronto!

  • I wonder if this can be fixed through the courts? Problem is do we have the time?

    • The courts are controlled by the Radical Left. Every judge in Alaska is a Democrat selected by the Bar Association

  • Suzanne — I take issue with your statement: “For some, the per diem is a handsome benefit, while for others, it barely covers their cost of having to have a place to live in Juneau.”

    .

    I assert that no legislator NEEDS $300.00 per day to live in Juneau during the session. None of them need $8,700.00 per month to live there temporarily. And certainly $36,000.00 for three months is way too much for Juneau living expenses.

    .

    If you know differently, please name names. I believe your comment is factually inaccurate.

    • To help those that don’t perform skilled labor or own a business, consider this and put other issues aside for just a moment…while they are in Juneau additional unscheduled days they are not at home working at their businesses or attending their real jobs. Many of them are losing real money by being legislators. Are you saying that government employees shouldn’t expect to be paid?

      If you work in a skilled field, most places in Alaska you will make more than $36,000 in three months.

      Public service shouldn’t be a path to riches nor should it guarantee poverty.

      • 12000 a month ? I’m not sure about your figures.

  • Here’s a simple thought experiment:

    If the legislators were FINED $300/day after the deadline for a budget, how quickly do you think they would get the job done?

  • Suzanne, the premise of your opinion is wrong. Even with $4 billion transferred from the Earnings Reserve and another $3 billion withdrawn for the State Operating Budget, there is still money remaining in the PFER to “raid” for a bigger Dividend (which I strongly oppose).

    I certainly won’t defend the Legislature’s actions on per diem and needing special sessions every year to perform their most basic task. Of course we, as a State, represented by our elected po;politicians have been tied up into knots for years over a single issue: The Dividend.

    Such are the problems of having too much money – lol

    • Nyman,
      So shake the money tree and float everyone’s boat. Isn’t that what socialist’s desire? $81.5 Billion in the Fund and steady growth at 12%. What good is all that money without trying to get some of it into the People’s hands?

      • You sound like a liberal. Where’s my basic government income.

        • It IS the people’s money. All natural resources in the state belong to The People.

  • If I hadn’t already supported recall Dunleavy I would now. He is Biden level incompetent.

    How in hell in the middle of a pitched budget battle do you miss $4 billion?

    If the government was a private business Dunleavy would be out on his ass for making such a rookie mistake.

    I wonder if Laddie Shaw will fight to protect Dunleavy’s ass the way he did state workers?

    Resign Dunleavy. Today. You’ve done enough damage. The average Alaskan can’t take any more of your “standing small”.

  • I believe their per diem is also not taxable under IRS regulations, an added bonus!

    • So in essence, the legislators get a $45,000 PFD and we get $525…..tops. Sounds about right. While the rest of us go to work and buy groceries under a mask mandate, these horses a$$es leg wrestle and waste 6 months of our money …… and do nothing but complain about us for wanting our full legal dividend. Sounds about right. Anybody sick of this system yet?

  • I just checked the PFER. Even after taking $3.1 Billion for FY22 POMV there is still $12.2 Billion uncommitted in the Earnings Reserve. Why cry about a measly $4 billion that is going to increase our annual return into the future? Vetoing it was a dumb idea in the first place – This administration shoots themselves in the foot without fail – lol

  • Would probably be cheaper and more effective if the State just provided room and board for legislators while they were in Juneau instead of paying per diem. Make sure the accommodations are mediocre at best and they’ll be motivated to get their work done so they can go home.

    • Better yet — make them meet in Shemya.

  • State is taking today off because the fourth was yesterday. S was onset what that costs us and what is the reasoning behind it?

  • $4 billion earns $240 million more for the state every year, at a conservative 6%.

    • Stop it with all that logic.

  • They have one task: to prepare a balanced budget within ninety (90) days. We don’t need nor want another exotic holy day. They don’t obey their (by-) laws so they shouldn’t be allowed to write another ever. If we ever have another lawful US President who will obey the US Constitution we should convene another state convention and limit state government to just ten (10) departments and deactivate agencies. We should elect a Secretary of State and establish sheriffs who will obey the US Constitution in all first class cities.

  • Does anyone understand why Governor Dunleavy was talking about saving the $4B in any event?
    Moving the funds from the Earnings Reserve Account where it can and will be blown and placing the funds into the corpus of the Permanent Fund where the money cannot be spent is a good thing for Alaska’s citizens.
    What is The Governor thinking?

    • Is he capable of thinking? Evidence says not

  • More shots from the Left hip by right- handed shooters. Poor marksmanship.

  • If they follow the statutory language for the dividend there is no problem, not following the statutory language is the whole reason for there being a problem.

  • Someone tell me what good it does for the people of Alaska to cram another $4 billion into the corpus of the Fund? Sure it’s bigger and will grow even faster. But apparently we will NEVER get any of that money for our own household needs.

    So why grow it bigger? Oh wait, I get it. To fund bigger government. The light just came on.

  • The legislature got their wish. The PFD is going to hit zero

  • $525 is insult to injury. I spend over $300 per month just on food and what few basics I need.
    I believe the legislature just laid the straw that will break the camel’s back.
    Dunleavy’s veto simply brings attention to the insult.

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