A bill that started out as a Permanent Fund dividend bill became an omnibus spending package in the Legislature, with more than $300 million in what were essentially veto overrides — a slap back at Gov. Michael Dunleavy by the controlling Democrats and moderate Republicans in the House and Senate.
It will head to the governor’s desk today. Dunleavy can sign HB 2001, reject it, or use a selective red pen to trim it.
All three of those actions come with significant political risk: Dunleavy ran on balancing the state budget and ensuring Alaskans get the statutorily established amount in their Permanent Fund dividends, which is $3,000. HB 2001 only gives Alaskans $1,600.
Dunleavy has 20 days to make his decision on HB 2001, after which the Legislature can call itself into Special Session to override any vetoes — if it can find the votes necessary. It needs 40 members to agree to a special session and 45 votes to override vetoes.
Dunleavy said that he will not call the Legislature back into an immediate special session. Senate President Cathy Giessel and House Speaker Bryce Edgmon have requested one to tackle a restructuring of the Permanent Fund dividend formula going forward. They and many other legislators feel that the current formula is unsustainable, and that state programs must be prioritized over dividends.
As for the Capital Budget, Dunleavy plans on signing SB 2002 this week. That bill has non-capital spending in it as well as road projects. Programs not previously funded by the Legislature include the Alaska Performance Scholarship, the WWAMI medical education program, power cost equalization funds (energy subsidies) for rural communities, and the state’s ability to draw in more than $1 billion in federal infrastructure dollars.
Dunleavy may use his line-item veto on the Capital Budget: “While I intend to sign SB2002, I will exercise my line-item veto authority where necessary,” he said last week.
Dunleavy and his team have been in talks with the University of Alaska Board of Regents to look at an additional $40 million in transition funds to allow the university system to wean itself off of the enormous state subsidies that many feel are unsustainable for Alaska going forward.