Capitol Live: Legislators examine future of Permanent Fund

Capitol Live: Legislators examine future of Permanent Fund

Live updates from inside the Capitol.

4:03 p.m.

We’re moving on to House Joint Resolution 18, which was just proposed yesterday. The bill’s sponsor, Rep. Jonathan Kreiss-Tomkins, is speaking about it now. It also targets the state’s annual draw from the Permanent Fund.

The bill consolidates all the accounts in the Permanent Fund into one account and protects that account in the constitution. Because it’s a constitutional change, it requires two-thirds of the House and Senate.

Ten representatives have already signed on as co-sponsors. It’s mostly Democrats, but Republican Tammie Wilson (co-chair of the House Finance Committee) also signed on, along with fellow Republican Reps. Johnston, LeBon and Knopp.

More thoughts from Kreiss-Tompkins:

— Alex McCarthy

3:55 p.m.

Frankly, there’s not a lot of popularity in this room for this bill. Both Vance and Rep. Gabrielle LeDoux have expressed that they disagree in general with the premise.

Wool says he doesn’t want to be locked into paying a large check when oil revenues go down in the future. He says he wants state government to not be locked in to paying a high dividend if it can’t afford to.

“Who do you represent,” Vance says, “the state or the people?”

She means it to be rhetorical, but Wool responds anyway.

“I think the state and the people of Alaska are inextricably entwined,” Wool says. “If we have a good system that supports the people, then the people will support the state.”

— Alex McCarthy

3:45 p.m.

Wool wraps up his brief presentation. Rep. Sarah Vance jumps in, saying she has many questions.

“We have very different views on this but I’m going to remain respectful,” Vance says.

She says the PFD was set up to try and offset the state’s dependence on volatile oil revenues, but this bill ties the dividend even more closely to oil prices.

— Alex McCarthy

3:35 p.m.

House Bill 132, proposed by Fairbanks Rep. Adam Wool, takes a fairly radical approach to the Permanent Fund. Senate Bill 26, which passed last year, allows the Legislature to take a percentage out of the Permanent Fund’s earnings reserve. Wool’s bill dictates that the whole amount drawn through this will go to state spending.

Under this bill:

• If the price or volume of oil production increased, so too would our checks.

• If oil taxes increased, so would the dividend.

• If new natural gas resources came online, dividends would rise.

• Increased dividends would also offset the negative effects (higher fuel, utilities, and shipping prices) caused when oil prices are high.

— Alex McCarthy

3:10 p.m.

The House State Affairs Committee is hearing four bills this afternoon that deal with the future of the Permanent Fund and the dividend. The first bill on the docket, House Bill 139, would allow the Alaska Permanent Fund Corporation (APFC) to easier contract with subject matter experts to advise them on an investment.

For example, Permanent Fund CEO Angela Rodell explains, if the APFC is considering making an investment in the biotech field and they want to contract with a doctor to inform them about the investment, the APFC has to go through a time-consuming state process. This bill would allow the APFC to skip the state contracting process. Rodell says this only happens about 10 times a year.

— Alex McCarthy

11:59 a.m.

A quote I found interesting from Sen. Bert Stedman this morning about his budget conversations with Gov. Mike Dunleavy:

“My conversations with him are pretty direct, frankly. I expressed to him that there’s no way we can deliver the budget reductions in one year. It can’t be done. We need legislative action, the agencies need time to prepare themselves, there’s a litany of things. We’re delivering what we can deliver.”

— Alex McCarthy

11:32 a.m.

The representatives are referring to a presentation from the Department of Law’s John Skidmore yesterday that pointed out that the state’s prison population was actually decreasing prior to SB 91. From 2011-2015, recidivism declined 6 percent, according to the presentation.

— Alex McCarthy

11:23 a.m.

The three representatives are asked about how they view the PFD. Tilton says she believes in the traditional formula for calculating the dividend, and says she believes people have a better idea of how to spend their money than the government does.

“As government expands, liberty contracts,” Tilton says.

— Alex McCarthy

11:15 a.m.

Pruitt says that the No. 1 thing people said when he knocked on doors last year was that they didn’t feel safe.

“We should have talked about this a long time ago,” Pruitt says. “I hope the public is as frustrated as I am.”

— Alex McCarthy

11:01 a.m.

House Minority leaders are holding a press conference now expressing frustration that the House Majority introduced House Bill 145 yesterday — a crime bill — with just three weeks left in session. Minority Leader Lance Pruitt says HB 145 isn’t enough, and that rushing a bill at the end of the session is no way to put together policy.

Alongside him, Reps. Cathy Tilton and Colleen Sullivan-Leonard are expressing their frustrations as well.

“It’s not a fix,” Sullivan-Leonard says. “It’s just a repeat of (Senate Bill) 91 and our constituents don’t want that.”

Pruitt points out that this bill is being put forth by people who have supported SB 91. He’s not naming names, but Rep. Matt Claman (chair of the House Judiciary Committee) proposed HB 145. Claman has spoken in favor of criminal justice reform and has expressed faith in parts of SB 91.

— Alex McCarthy

10:20 a.m.

The committee goes into recess, and will come back together at 1:30 p.m. today to talk about Senate Bill 32, which is the major crime bill that looks to repeal Senate Bill 91.

— Alex McCarthy

10:10 a.m.

Von Imhof is no-nonsense today. She says it is “fiscal insanity” to make long-term sacrifices just to pay a big PFD this year. She says she’s here as a fourth-generation Alaskan and hopes that four generations from now her family members are still in Alaska and getting a dividend along with a robust education system.

— Alex McCarthy

Sen. Natasha Von Imhof, R-Anchorage, pictured here on Feb. 18, 2019, asks why adult preventative care was targeted for elimination, saying she has heard from providers that this service often will bring people into a clinic where they can be asked if they have other medical needs. (Michael Penn | Juneau Empire File)

Sen. Natasha Von Imhof, R-Anchorage, pictured here on Feb. 18, 2019, asks why adult preventative care was targeted for elimination, saying she has heard from providers that this service often will bring people into a clinic where they can be asked if they have other medical needs. (Michael Penn | Juneau Empire File)

9:52 a.m.

Co-chair Natasha von Imhof grabs the mic and promptly drops it. Raising her voice just a little, the Anchorage Republican says multiple times that the $1.6 billion deficit that the Dunleavy administration touts is “contrived” and that the state is just fine.

“We’re not in a crisis,” von Imhof says. “We’re fine. We just have a priority crisis.”

The state has the money, she says, but the legislators just need to work out their priorities. She points out that in the House and the tentative Senate budget, there is actually a slight surplus. That puts a little bit of a buzz into the room.

— Alex McCarthy

9:30 a.m.

Teal goes off for a bit about some “online comments” he saw about how people thought he was trying to guide the Legislature one way or another. Office of Management and Budget Economist Ed King is very active on social media, and has been critical of Teal on occasions (including the other day, as you can see below). Teal doesn’t explicitly say which comments he’s responding to, but this is a fairly safe guess. He says his presentations are centered around math, not policy.

Later on, Teal says that if the Legislature wants to pay more than about $1,200, they’ll have to make deeper cuts than what the House made. If they pay a $3,000 dividend, he says, that will require about $1.2 billion more in cuts than what the House proposed.

— Alex McCarthy

The Alaska Legislature’s Finance Division Director David Teal answers questions from the Senate Finance Committee on the state’s budget at the Capitol on Thursday, April 25, 2019. (Michael Penn | Juneau Empire)

The Alaska Legislature’s Finance Division Director David Teal answers questions from the Senate Finance Committee on the state’s budget at the Capitol on Thursday, April 25, 2019. (Michael Penn | Juneau Empire)

9:15 a.m.

We’re back at the Senate Finance Committee meeting, where Legislative Finance Director David Teal is back in what Sen. Bert Stedman calls “the hot seat.” He’s taking another look at the long-term effects of the House’s budget and the governor’s proposal, quickly skimming over what he talked about earlier this week. Read our story on that here.

Prior to this meeting, Stedman (the chair of this committee) told media members that he believes the Senate is on schedule with its budget and that the budget should hit the Senate floor sometime next week. He said they should be able to get a budget to the governor by May 15.

Yesterday, I spent most of the day tracking down people to talk about the possibility of a new ferry terminal at Berners Bay. Read what they had to say here.

— Alex McCarthy

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