Sen. Bert Stedman: Alaska’s PFD formula should change this year

Senator Bert Stedman, R-Sitka, speaks to on the Senate floor on July 8, 2019, in Juneau, Alaska. (Photo by Rashah McChesney/KTOO)

For almost 20 years, Sen. Bert Stedman has represented much of Southeast Alaska in the state Legislature. District A includes the communities of Ketchikan, Wrangell, Petersburg and Sitka, and several smaller towns in between.

The next legislative session begins Tuesday. For the 11th year, Stedman will co-chair the Senate Finance Committee. He’ll oversee efforts to create a multi-billion dollar operating budget.

There is a lot on the table. One recurring issue is the Alaska Permanent Fund. Stedman told CoastAlaska’s Angela Denning that the state needs to balance its longterm fiscal health against its ability to pay large Permanent Fund dividends.

Listen:

Bert Stedman: It’s not the individual dividend that creates the problem. It’s when you combine everybody’s dividend together. We don’t have the cash. So we’re going to talk about that and try to come up with how we can rewrite the formula and make some adjustments and see how that goes. But clearly, there’s no math model that I’ve ever seen that shows that we can afford to not change that dividend formula.

Angela Denning: So what I’m hearing is that maybe instead of looking for new revenue and more money, maybe looking at what the state is already getting now.

Bert Stedman: Well, there is support by some legislators to impose income tax or sales tax across the state and pay it out as dividends. But you’re just taking it from people that are working and spreading it out. That doesn’t make any sense. I think it’s unlikely we’re gonna pass a statewide tax and income tax or sales tax.

Denning/CoastAlaska: One of the big budget items for the operating budget that you see is for the Alaska Marine Highway System. You know, Southeast and other coastal areas have not been satisfied with the lack of ferry service in recent years. I’m wondering what the Legislature can do about that. What are your thoughts? Because Gov. Dunleavy’s administration has vetoed millions in ferry funding in his first four years in office. He’s going to be around for another four years. What would you like to see this year?

Bert Stedman: Well, let’s not forget that the Legislature is the appropriators. But the governor has a line item veto on appropriations. And it’s the strongest veto protection of any governor in the country — it takes three quarters of the vote in the Legislature to overturn an appropriation veto. So, unless you can overturn his veto, which is unlikely, he could set that level of funding to, frankly, any level he wants. He has a very strong hand in some of the budget negotiations that take place. So, I’ll work with the governor to try to restructure the marine highway, the best we can from our position on the coast. But not all legislators are supportive of the marine highway. And there’s fewer and fewer of us on the coast relative to the Railbelt. So it is a challenge. On the positive side, we’ve got some federal funding that Lisa Murkowski structured in the appropriation bill here several months ago, and there’s 200 million a year for various systems. But [the state is] not the only one that qualifies. So we’re still sorting through that to figure out how much the state’s going to actually get when it’s going to arrive and then how to split it between operating costs and capital costs. So that’s a positive. But my goal is to make sure the marine highway still is in existence four years from now.

Angela Denning, CoastAlaska

Angela Denning is CoastAlaska's regional news director, based in Petersburg. CoastAlaska is our partner in Southeast Alaska. KTOO collaborates with partners across the state to cover important news and to share stories with our audiences.

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