What happens next with budget, dividend?

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On a drizzly Saturday morning in Juneau, the pressure cooker that is the Alaska State Capitol boiled over.

The Alaska House of Representatives, which had been high-centered for nearly a week, finally took a vote on ratifying the budget passed on Tuesday by the State Senate. The vote occurred after a firestorm of support for the Senate version of the budget from constituents across the state, asking for ratification of the statutory Permanent Fund dividend. 

Along with that support came significant opposition from some of the state’s largest special interest groups. Opposed to the size of the Permanent Fund dividend in the Senate budget, a campaign to label the vote as one for “unsustainable government spending” went into overdrive this past week.

While the House continued to delay its vote, the influence from third-party groups began having a material impact within the Capitol and on lawmakers. Spanning the political spectrum, a mixture of public shaming tactics, visits from lobbyists, and letters from trade associations mounted up a pressure press on representatives considering a yes vote.

The pressure worked. Saturday’s failed ratification vote, called a concurrence vote, came after lengthy floor debate. Representatives from both parties crossed the aisle to vote both for and against the Senate version of the budget. By a vote of 18-22, the state’s operating budget, which is the only duty of the Legislature under the Alaska Constitution, is now still unfinished as the session careens towards May 18, the last day legally egislators can meet without a special session. 

Debate on the floor was tense but mostly cordial. The differences of opinion overwhelmingly centered along the size of the Permanent Fund dividend. Some remarks revealed the conflicting feelings of legislators, such as Rep. Geran Tarr, an Anchorage Democrat.

In a voice that at times nearly cracked, Tarr recounted her district’s high poverty rate, and the life-changing effects a statutory Permanent Fund dividend would have on her constituents. Tarr’s concerns were conflicted by the need to get other legislation passed, including her signature bill on victims’ rights. 

Tarr ultimately voted no, along with a majority of her mostly-Democrat caucus. Joining Tarr were Reps. David Eastman and Chris Kurka, both Republicans of Wasilla. Both lawmakers made remarks about the unsustainability of the Senate’s budget number, as well as the lack of firm prohibitions on abortion funding from state Medicaid dollars (the Alaska Constitution requires taxpayer funded abortions, despite years of defunding attempts by governors and lawmakers). 

What took place after the vote raised more than a few eyebrows. Speaker Louise Stutes appointed the House’s negotiating team to wrangle over the differences in the budget with the Senate. The team, called a conference committee, has almost every year been chaired by the co-chairs of the Finance Committee and the ranking Finance Committee member from the minority caucus. But not this year.

Stutes selected Rep. Kelly Merrick of Eagle River to chair the committee, and appointed Rep. Dan Ortiz of Ketchikan and Rep. Bart LeBon of Fairbanks. Each one of the three members Stutes chose has voted publicly against a Permanent Fund dividend that is calculated according to law. Notably absent from being appointed to the conference committee was Rep. Neal Foster of Nome. Foster, a rural Democrat and the co-chair of the Finance Committee, actually guided the House building of the operating budget. 

The omission of Foster from the negotiating team points to one likely outcome: Foster’s district overwhelmingly supports a full statutory dividend, and his ability to maneuver in favor of a lower dividend is limited. By removing Foster from the conference committee, the ability to lower the dividend amount in the negotiations shields him from a decision that would pit him against either his district or his caucus. The makeup also allows Kelly Merrick the ability to vote for a higher dividend without risking it being adopted by the House negotiating team. 

What happens next is unclear. The Alaska Senate will likely go into its floor session shortly and be asked to seat its own negotiating team. Tradition would be that the Senate Finance co-chairs, Sens. Bert Stedman of Sitka and Click Bishop of Fairbanks, be appointed along with a Senate Democrat.

Stedman has a history of hard negotiations, employing legislative tactics that have been characterized as bullying and coercive by his opponents, while deemed necessary by his supporters.

The ire of a negotiation effectively led by Stedman in the House, and indeed much of the Senate, is palpable. 

But what is clear is both the House and the Senate benefit from the negotiating teams being at least constituted. This is because the rules governing how bills move through committees are accelerated, under a provision called the 24-hour rule. With that rule in effect, the list of legislation that will begin passing and be part of the session’s endgame will grow exponentially, including items such as crime, elections, education, and state employee pay. 

Time is not on lawmakers’ side. With adjournment required at the latest by midnight on Wednesday, the Legislature will need significant collaboration and breakthroughs in negotiation to ward off the chance of missing the deadline, and threatening a government shutdown on July 1.

32 COMMENTS

  1. Just the opportunity for those in power to go into extra session and pad their pockets with more per diem while we are still the losers.

  2. Suzanne ma’am we love your guts and integrity thank you for showing us who to contact yell at and most ask GOD to oust. Suzanne Suzanne the leader of the ladies union. Alaskans please ask GOD to help us with these evil clowns. GOD Jesus Suzanne and the citizens please ALL ask GOD for our help. BOOOOOO

  3. Bring a special session here to Anchorage or the valley and we will see if they change their holier than thou attitude towards the people of Alaska then.

  4. If you don’t vote to give the people the pfd cash in full your fired. WHO DOESNT WANT A FULL PFD WITH BIDENS GAS PRICES! Not to mention we pay more for everything here. If you don’t want your pfd DONATE IT TO WHO EVER YOU WANT. Our family could us the money to buy food and gas ya kuntś!!!

  5. 1-Tarr is a hypocrite.

    2-Dunleavy will wet his pants and sign whatever they give him. As usual.

    3-The PFD is dead and the legislature holds all of you in contempt.

  6. Thanks for your insight and commentary Suzanne. This conference committee is designed to do one thing: kill the PFD and lick as many boots as possible in the process. I had a chance to speak with Stedman last January, after he had given a presentation explaining the impossibility of continuing the PFD and the difficulty of balancing the budget. He admitted that if either increased oil production or higher oil prices occurred, there would be no reason to block the PFD. Notably absent from his comments was any reference to the law determining the PFD amount… This action by the House is simply cowardice with a large dose of bootlicking thrown in to assuage their consciences. Why won’t they represent their constituents – who overwhelmingly support a full statutory PFD? I wonder what the magic shoe polish flavor is??? Yeah, I’m really disappointed and very angry. No amount of excuses about “principle” can ever remove the guilt over their thieving ways – or is it just stupidity? Anyone could calculate what Stutes would do to get her way with a conference committee. Vote Stutes out – Kodiak, how can you keep voting for her?

    • The people of Kodiak will have a part of a year to try to get Stutes to look them in the eye again. When she does see her shifty purpose of evasion gazing to outer space? Perhaps it’s time to select a worthy individual to present Kodiak’s will for a change.

  7. So shut down the blooming government and take away Stutes’ pay. She isn’t doing her job! Her job is not to nullify what the people of the State of Alaska want, but to serve the people. She serves herself and herself only.

  8. One may ask what is wrong with these people, but the answer is obvious….

    They represent themselves and their overlords, not the people….

  9. The conference committee is made entirely of RINOs and PFD thiefs. Ironically the only PFD supporter is Democrat Bill Wielechowski. Get ready for a big steal

  10. Let’s see who Micciche appoints. If it’s Stedman, Bishop, and an Anchorage Democrat then the PFD will be what the House sent over. Since Micciche has historically been in favor of government largess and not in favor of the statutory PFD, I don’t hold out much hope that the lip service he has paid will amount to anything.

    We need new elected representatives in about 75-80% of the seats that are up for election this cycle.

    I certainly hope Governor Dunleavy uses the power to veto heavily on this budget, whatever comes out of this sham.

  11. We need this Pfd to make ends meet. Also to stop homeless family’s improve their lives.many family’s are only one income so are going with out some neccesities .pushing them to welfare from state to feed them. This is a matter of my concern as an Alaskan. We can’t afford to cause more homeless family’s this winter.the younger generation of family’s are suffering to survive. And us elderly are pushed to food box help to be able and eat , the rise in all groceries is asternomical after 2 years of Covid. .please reconsider your community’s businesses struggling to stay afloat this Pfd would help whole state. More people are moving to alaska. To avoid populated areas because of Covid .this puts a strain on our jobs available. now that country has stopped more jobs buy stopping the drilling here many are now misplace with no jobs.help your people in this struggle to survive these hard times

    • I agree – we could use these PFDs to offset inflation and help desperately in basic Reading, Writing, and Math skills (if used correctly).
      However, the AK population isn’t growing according to statistics. Perhaps, you are seeing population redistribution throughout the Last Frontier.
      When gas/energy is historically high it CAN do great things….our state could be flush with money and a vibrant economy. It’s just all in how you spend it or allow it to be spent. (Look at Saudi, UAE, Putin, etc…..).

  12. So when did a process due (a pfd distribution) become judicially, jurisdictionally rewritable? I’ll wait…(hint NEVER).

  13. If the legislators can ignore the law re the PFD, then I suggest they ignore the law regarding the funding of K12 education. Our investment in education is only feeding the government unions and not the kids. Let parents choose the best education fit for their kids and allow the money to follow the student, not follow the union members.

  14. Don’t take an oath with a purpose of evasion by choosing to refuse to present the will of the people in your district because you intend to substitute your own will instead of theirs. That is what purpose of evasion means in case you didn’t know. You invalidate our form of government – the republic.

  15. So the unions flipped Kurka and Eastman? Got it. Kurka just opted out of the Gubernatorial race. Eastman might have opted out of politics. Cheers –

    • Kurka and Eastman might claim to be conservative and on the right, but their actions and their votes show they are in cahoots with the left.

      • What an ignorant comment. It’s “conservatives” like you who claim to be about small government and family values, then cry about not getting their government money every year, like they did anything to earn the PFD. Congrats, you live here. That makes you entitled to a stimulus check every year? Meanwhile, a couple principled conservatives vote against the budget because they oppose funding child murder, and get attacked by their own side for it because they shut off the sweet sweet government money spigot. Your hypocrisy is sickening, and your ilk is what is wrong with Alaska politics.

        • Karl,
          You obviously do not have a firm grasp on what the Permanent Fund is nor what the Permanent Fund Dividend is. You should really do yourself a favor and look into why the Permanent Fund exists and why a divided was created. The short story is to keep government from wasting money, do you think it’s coincidence that after having raided the dividend that big government stooges keep going back to the trough.

          A key conservative principle is that individuals and families are better at making decisions for themselves and their children about health, education, jobs and welfare than the government ever will be. Part of that belief is the fact that as a whole individuals are better than government at spending their own money. If you think Kurka and Eastman are principled I’d suggest you review their voting records and the results of those votes. Like it or not, the AK Supreme Court has ruled that abortion funding can be paid with state funds and barring those funds is unconstitutional. If these principled legislators, who apparently only have one principle, believe in changing the constitution then they should try and do so instead of being turncoats at every opportunity to try and score political points that damage their supposed principled cause and the citizens of this state.

          • You have been misinformed. The Permanent Fund was created to ensure government funding, nothing more. It is clearly laid out in the Alaska Constitution:

            At least twenty-five percent of all mineral lease rentals, royalties, royalty sale proceeds, federal mineral revenue sharing payments and bonuses received by the State shall be placed in a permanent fund, the principal of which shall be used only for those income-producing investments specifically designated by law as eligible for permanent fund investments. All income from the permanent fund shall be deposited in the general fund unless otherwise provided by law. (Article IX, Section 15)

            So no, I don’t think it is a coincidence that the Legislature use it to fund the government. It’s law. The dividend was created for the same reason Social Security was created: to get citizens hooked on suckling the teat of the government as a means of control. Now, I will agree with your point that the Permanent Fund was created to stop the government from spending ALL the money, but the idea that citizens are entitled to ANY of that 25% is a result of years of programming. This is why there are some who are calling for a constitutional convention to put the PFD into the AK Constitution. If that happens, I’ll be right there next to you yelling and screaming about how the government is robbing the people. Until then, realize you’ve been brainwashed and IT’S NOT YOUR MONEY.

            As for Kurka and Eastman, the only thing they are guilty of is not playing the political game “correctly.”

          • You don’t need to lie just because you think money is more important than life. There is nothing in the Constitution supporting abortion or paying for it. Our activist court made up their own legal precedent (just like Roe v Wade) to justify telling the State to pay. It doesn’t have to, the courts have been disobeyed quite a few times, but it takes an administration with the guts to do what’s right.

        • Karl,

          So much for that principled stand, your boys folded like the cheap suits they are! They’ve fooled folks like you into thinking they have principles but they just showed you they have absolutely none.

  16. Disappointing that legislators elected on better education funding instead voted to divert almost an extra $1 Billion to the Federal government they supposedly despise instead of education.

  17. The $5,500 each for a family of four making $40,000/year (of which there are many in Alaska), is… 36% of their family income – and at a time when energy and food costs are soaring well above the “official” inflation rate of 8.5%. Legislators, are you willing to take a 36% pay cut and donate it all to the poor?
    I didn’t think so – they’re too busy slinging their hair around yelling “greedy and entitled!” to have a clue.

  18. From the Federal Government to the state to the local government, theses so called elected officials are there to line their pockets from lobbyists etc. Even though Lisa Murkowski is a Catholic who is pro choice, pro planned parenthood and pro abortion, I have a bet she will be reelected. I certainly won’t give her my vote.
    No more watching the politics for me, put on the music and dance.

  19. I can only assume the government has gone blind. Otherwise they would see how desperate things are for so many people. Covid has costs so many so much. It has caused so much pain and hardship. How can anyone sit back and watch this and not want to help ease the burdens and pain that so many have. Drain their account to til they’re forced to feed their kids cereal for supper because breakfast good for every meal, or is they can afford to buy.

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