Bill setting PFDs, reversing vetoes headed to Dunleavy on Wednesday, spokesperson says

Gov. Mike Dunleavy, a Republican, talks with reporters about his hope that the Legislature complete its work on the state budget and permanent fund dividends. He sat down with reporters in the governor's office in the Capitol in Juneau, May 29, 2019. (Photo by Andrew Kitchenman/KTOO and Alaska Public Media)
Gov. Mike Dunleavy, a Republican, talks with reporters in the governor’s office in the Capitol in Juneau on May 29. A spokesperson for the House majority caucus said legislative leaders plan to transmit a bill reversing most of Dunleavy’s operating budget vetoes to the governor on Wednesday. (Photo by Andrew Kitchenman/KTOO and Alaska Public Media)

The Alaska Legislature’s leaders plan to send a bill to Gov. Mike Dunleavy on Wednesday that would set permanent fund dividends at $1,600 and reverse most of the vetoes Dunleavy issued over a month ago.

The Legislature passed House Bill 2001 on July 29. But bills aren’t officially transmitted to the governor until they’re signed by both the Senate president and the House speaker. A spokesperson for the House majority caucus says the bill will be sent to Dunleavy on Wednesday. 

Both chambers on Monday canceled the floor sessions that had been scheduled for Tuesday. The special session is scheduled to end at midnight Tuesday night, because the state constitution limits special sessions to 30 days and Tuesday is the 30th day.

The bill to set PFDs and reverse most of Dunleavy’s operating budget vetoes was one of two major bills passed last week.

The other was Senate Bill 2002, which would fund the capital budget and maintain 54 separate accounts that fund programs like Power Cost Equalization and university scholarships and grants.

The capital budget funding bill has already been sent to Dunleavy’s desk. He has until Aug. 17 to sign the bill or veto all or parts of it. Dunleavy has said he’s glad the Legislature passed the measure.

But Dunleavy expressed disappointment with House Bill 2001. The governor supports a full dividend under the formula set in a 1982 state law, which would be roughly $3,000 this year.

If he receives the bill on Wednesday, he would have until Aug. 30 to sign it, veto it or issue line-item vetoes. Dunleavy has said he wants to decide on the bill sooner rather than later. The governor wrote on Twitter last week that he stands by his decisions on June 28, which included vetoing 182 line items totaling nearly $400 million in state funding. Dunleavy also wrote that he considers the vast majority of the budget to be final. But it’s not certain how he’ll handle the veto reversals or the $1,600 PFD.

Paying the full dividend this year would require the state to draw more from permanent fund earnings than is outlined in an law enacted last year. Lawmakers in both majorities have expressed concern that overdrawing fund earnings could threaten the earnings reserve and PFDs in the future.

Legislative leaders have proposed a third special session on the future of permanent fund earnings and dividends, in which the Legislature could pass a change to the dividend formula. One alternative is to base dividends on a share of the total draw on the permanent fund’s value.

Dunleavy will have to decide whether he will accept a lower dividend or again request that the Legislature pass the full amount. The state’s Permanent Fund Dividend Division requires that dividend funding be set by Aug. 31 if dividends are to be issued on the normal schedule of the first week of October. So a third special session could be held soon if the governor vetoes the PFD funds.

Andrew Kitchenman

State Government Reporter, Alaska Public Media & KTOO

State government plays an outsized role in the life of Alaskans. As the state continues to go through the painful process of deciding what its priorities are, I bring Alaskans to the scene of a government in transition.

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