Explainer: The fate of the Permanent Fund dividend on Friday the 13th

Friday the 13th morning is greeting Juneau with all the tension and stakes of a poker game in the middle of a barroom brawl.

What’s at issue is nothing less than the Permanent Fund dividends of Alaskans, the legislative session descending into chaos, and the ability of the state government to not shut down.

A climate of old Juneau is descending on the capital city, with strong-arm tactics from some of the most powerful special interests and lobbyists on lawmakers coming out into the open. 

Read: AFL-CIO president blasts full Permanent Fund dividend proposal

The vote scheduled for today in the Alaska House of Representatives is whether or not to agree with the budget passed on Tuesday by the Alaska Senate. If the House agrees with the changes, which is called a motion to concur, then the budget deliberations are complete, and head to Gov. Mike Dunleavy for veto review and potential signing into law.

If the House does not concur, the budget is kicked to a negotiating team from each body, called a conference committee, that is handpicked by the Speaker of the House and the Senate President. Conference committee negotiations are not public, its meetings not subject to normal public notice requirements, and its decisions are not negotiable by any other lawmakers: It becomes a “take it or leave it” decision. 

In that budget is a statutory permanent Fund Dividend (and an additional payment meant to offset the rising cost of energy for Alaskans). The PFD has not been paid out according to the formula laid out in law since former Gov. Bill Walker decided on his own to veto it in 2016, kicking off nearly a decade of open political warfare on the state’s fiscal future.

The PFD this year, according to the formula, would be $4,200 per Alaskan, the highest in history. This payment comes as record inflation has eaten away at the savings of Alaskans, and the cost of gas and heating oil has risen to its highest levels in decades. 

The budget before the House today is the closest the state has come back to the original PFD amount since Barack Obama was president (and Joe Biden was simply Vice President).

A coalition of mostly Democrat lawmakers have teamed up with members of the Senate leadership to kill off a concurrence vote, and to lower the PFD amount by as much as possible. To do that, observers in Juneau have witnessed a parade of lobbyists from the oil industry being summoned to Democratic lawmakers’ offices. This was occurring at the same time that the Senate Finance Committee, led by Sen. Bert Stedman of Sitka, fast tracked a massive oil tax bill in his committee for potential passage. Senator Lyman Hoffman, a Democrat from Bethel, gave the ghost away when he said several times to several people that the oil tax is a cudgel to force the oil industry to lobby the House to vote against the budget. 

While some Democrat operatives were attempting to yank oil into the fight (reports so far are unsuccessful, oil executives are historically leery of wading into an open budget fight), other arms of the left were deployed. The state’s largest union engaged in a full court press on every lawmaker in the House, demanding a rejection of the vote.

Coincidentally, Rep. Zack Fields, a Democrat of downtown (and an employee of local union leader Joey Merrick) issued a newsletter to every member of the House, alleging that a vote to support the budget would gut education funding because the bill is unsustainable (the current budget would cut not one dollar of existing education funding for schools in the coming fiscal year, though the ability to forward-fund a year ahead was is impacted). 

Another attempt came from the association of school district executives, with its director sending an email message to the public and legislators, demanding a rejection of a budget that impacts schools. This effort comes on the heels of several Alaska school districts awarding superintendents and executives significant pay increases. 

Other attempts are more subtle. Several sources verified that high-placed leaders in the business community who have lobbied for PFD cuts for years were personally calling House Republican lawmakers and demanding a rejection of the Senate budget. 

While these external efforts have been constant since Tuesday night, House Speaker Louise Stutes has used the procedural tools within her power to delay a vote on the budget. The delays, which have occurred over several days, indicate there is currently sufficient support for the Senate’s budget, which means members of her own caucus appear inclined to join with the majority of House Republicans and concur. Stutes’ action points to a hope in her leadership that a longer delay allows more time for the pressure tactics to work. 

Both sides are running out of time. Several pieces of priority bills not connected to the budget are moving, and the legislative session is set to expire at midnight on Wednesday, May 18.

Though the governor (or the Legislature through a super majority) could call a special session, the amount of absences reported are high enough to preclude any chance of success in that event. If the House does not take action by today, the chance of the session not descending into chaos goes up significantly. 

However, the climate has already turned poisonous. The lobbying from both sides has reportedly gotten personal, with several confrontations nearly turning physical. What is clear is that the Democratic leadership in collusion with several Republican Senate members are collaborating to scuttle a budget vote at all costs.

The vote on the budget will be the defining action of the 2022 legislative session, and will answer the question: Can special interest lobbying overwhelm the widespread public support for the PFD.