Alaska lawmakers sprinted to the almost-finish. Now their work is stalling amid PFD dispute.

Alaska State Capitol building (left) and Dimond Courthouse, Juneau on Jan. 23, 2017. (Photo by Skip Gray/KTOO)

Alaska lawmakers sprinted to try to finish their work before the regular session’s constitutional deadline last week, but they failed to pass the budget. Now, as a special session begins in Juneau, their momentum seems to have stalled amid disagreements over the size of the Permanent Fund dividend.

Lawmakers had been eyeing an adjournment by this coming Memorial Day weekend. But now, a week before state workers are warned of looming layoffs and six weeks from a government shutdown, the goal posts appear to be moving.

Sitka Republican Sen. Bert Stedman, the co-chair of the Senate Finance Committee, responded bluntly Monday when he was asked if a weekend adjournment was realistic.

“No,” he said. “I don’t think so.”

The state Senate and House have both passed the operating budgets needed to sustain state programs and services when the new fiscal year starts July 1. But those two budgets have significant differences that lawmakers say may not going to be easy to bridge — particularly when it comes to the PFD.

The Senate budget proposed a dividend of $2,300 — one of the largest ever — that draws more from the Permanent Fund’s investment earnings than lawmakers have agreed is a sustainable amount. The House’s budget includes no dividend at all, and many members are strongly opposed to breaking the spending cap.

Sen. Bert Stedman, co-chair of the Senate Finance Committee, listens to a reporter during a press availability in his office in the Capitol, Feb. 19, 2019.
Sen. Bert Stedman. (Skip Gray/KTOO)

“I don’t think to get a compromise on the dividend and the earnings overdraw is going to be very easy,” Stedman said in a meeting with reporters Tuesday. “The sooner the better. But the fiscal impacts of a bigger dividend earnings draw are significant, and they’re going to come back and be in our lap next year.”

Lawmakers are currently in a 30-day special session convened last week by Republican Gov. Mike Dunleavy.

But Dunleavy doesn’t appear to be playing a big role in the negotiations between the two chambers. A spokesman, Corey Allen Young, declined even to say Monday whether Dunleavy was even in Juneau. He also would not comment on a report by a political blog, the Alaska Landmine, that said Dunleavy was on a remote bear hunt last week.

In an email, Young pointed out that the majority caucuses in the House and Senate formed later than usual this year and faced some “unique demands” after an early adjournment last year due to the COVID-19 pandemic. Lawmakers are also debating how to spend hundreds of millions of dollars in federal relief money.

“Negotiations are underway” on the two budgets, Young wrote, adding that “there is every expectation” that disagreements can be resolved by the end of the special session June 19.

For now, though, lawmakers appear to be scattered, with just a quarter of House members present for their session Monday and eight of 20 senators excused.

“Part of this is, some folks weren’t expecting to be here this long, and so they made some other travel plans,” said Nome Democratic Rep. Neal Foster, co-chair of the House Finance Committee. “You’ve got to get the full body on both sides together so you can get concurrence at the end of the day. And I just don’t know how many excused absences are out there.”

Lawmakers have just five-and-a-half weeks to pass an operating budget before their inaction would shut down state government.

But if there’s no budget by June 1, Dunleavy’s administration will have to send 30-day notices of impending layoffs to state workers, which lawmakers have tried to avoid in the past.

“There is significant cost associated with that,” Stedman said. “There’s being documents put together to reflect that, so we could make sure that members within the Legislature understand that it’s not a costless event.”

It also costs extra money every day the Legislature remains in session, as members are entitled to $293 a day for living expenses. Those expenses are not paid during a special session, however, until lawmakers approve a fully-funded operating budget.

Alaska Public Media

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