Capitol Live: Public hearing on Dunleavy’s super-size PFD bills underway

7:30 p.m.

The public is testifying on Senate Bill 23 and Senate Bill 24, which would enact Gov. Mike Dunleavy’s “super-sized” PFD payback during the next three years. Alaskans from all over the state are calling in to voice their support for or against this pair of bills. With only one minute each to testify, there have been close to 100 testimonies so far. Sen. Mike Shower, R-Wasilla, said there are about individuals waiting to testify.

— Kevin Baird

6:15 p.m.

The Senate State Affairs Committee is holding a public hearing on Gov. Mike Dunleavy’s PFD payback bills, Senate Bill 23, 24:

• David Atnas would like to go on record saying “we should hold off on the big payback.”

Too much turmoil and uncertainty. Even if its over three years.

• Charles McKee, Anchorage, calls in about a mathematical equation. Sen. Mike Shower, R-Wasilla, and Sen. Peter Micciche, R-Soldotna are looking confused.

• Mike Prax of North Pole, says “I urge you to pass them out of committee as soon as possible.” Calls former Gov. Bill Walker’s use of the Permanent Fund earnings to fund government one of the most egregious acts against public trust.

• One local says he’s received 15 PFDs and they’ve all been “lovely,” but he urges a hard pass.

• One man, a Mr. Merritt from Wrangell, says he would gladly give his PFD to keep his government services going. Urges the committee to strike down these bills. —

— Kevin Baird

5:40 p.m.

I’m in the Butrovich Room where there will be a public hearing on Gov. Mike Dunleavy’s super-sized Alaska Permanent Fund dividend bills. As Alaska has struggled to find a long-term budget solution, PFD’s have been capped and money from the Permanent Fund earnings reserve have been used to fund state government.

Dunleavy had promised during his campaign to pay out a super-sized PFD to pay-back Alaskans the money they would have received had they been given a full PFD. Here is what would happen if Senate Bills 23 and 24 were to pass:

• Alaskans who were eligible for the 2016 PFD would receive an additional $1,061 in their 2019.

• The retroactive PFD payment from 2017 would be $1,289 in 2020.

• And if you received your PFD in 2018 you would receive $1,328 in 2021.

At 5:30 p.m. Alaskans began to sign up to testify. 64 people have signed up to testify. There are about a dozen members of the public in the room. Sen. Mike Shower, who chairs the Senate State Affairs Committee, said testimony will be limited to a minute each.

— Kevin Baird

2:18 p.m.

In House finance, Rep. Dan Ortiz, U-Ketchikan, asked why the $3.5 million public broadcasting grant would be cut out of the budget.

Budget Director Lacey Saunders, said public broadcasting is not a core service of the Department of Administration.

“It’s not statutorily required and therefore it was identified as non-essential,” Saunders said.

Ortiz asked if the loss of funds for public radio would be greater than $3.5 million due to a possible loss of federal grant matches.

Administrative Services Director Cheryl Lowensteinsaid, “There is some match funding.”

“The cost is greater than just $3.5 million. Is that correct?” Ortiz asked.

Lowenstein responded saying, “That’s correct.”

— Kevin Baird

1:51 p.m.

Senate Democrats held a press conference this morning. They did not mince words with their disapproval of Gov. Mike Dunleavy’s proposed budget.

“Don’t tell me your values, show me your budget, and I’ll tell you your values,” said Sen. Tom Begich, D-Anchorage. “That’s what we’ve got. It rings true with Governor Dunleavy for sure.”

He said he was “stunned by how uninformed” the governor seemed about his budget-making process, considering Dunleavy used to be on the Senate Finance committee.

“As one of my colleagues has said (the budget) declares war on kids, declares war on rural Alaska, and war on seniors.”

— Mollie Barnes

1:45 p.m.

The House finance committee is wrapping up an overview of the Department of Administration. Gov. Mike Dunleavy’s fiscal plan includes moving 86 positions to the Department of Administration in an effort to streamline and reduce government costs.

Rep. Tammie Wilson, R-North Pole, is asking how legislators can know what kind of cost savings there will be when jobs are consolidated under the Department of Administration.

— Kevin Baird

12:24 p.m.

Now’s your time to speak about the governor’s proposed fiscal plan.

Alaska Senators are looking for public testimony and feedback on the governor’s proposed amendments to backpay the PFD and stop it from being used for government spending.

Public testimony will be heard at 6 p.m. Thursday in the Capitol.

Gov. Mike Dunleavy’s plan for paying back recent years’ Permanent Fund Dividend would happen over a three-year span, according to the legislation. The legislation would also cement the PFD payments using the original formula through 2023.

Senate Bill 23 outlines Dunleavy’s plan to fulfill one of his key campaign promises — returning people the portions of their PFDs that were used to help balance the state’s budget under former Gov. Bill Walker.

According to the bill, Alaskans who were eligible for the PFD in 2016 would get an additional $1,061 in their 2019 PFD. Residents who were eligible for a PFD in 2017 would get $1,289 in 2020, and people who were eligible for a PFD in 2018 would get $1,328.

In 2016, Walker cut the amount of money available for PFDs to help fund state government in the midst of a budget crisis, and the Alaska Supreme Court upheld that decision. Lawmakers limited subsequent payments with legislation such as Senate Bill 26 in 2018, which approved using a portion of Permanent Fund money to help fund the state budget.

According to the governor’s fiscal plan, about $1 billion in cuts would be made to state spending to allow for this supersized PFD payment.

Alaskans can testify in person or by telephone. This is the first opportunity for public testimony on this legislation.

Testimony will be taken at Alaska’s legislative information offices. Participants are asked to sign up to testify by 7:30 p.m. Anyone who cannot reach an LIO can call one of three phone numbers instead. In Anchorage, the number is (907) 563-9085. In Juneau, it is (907) 586-9085. In all other cities (including Fairbanks), it is (844) 586-9085.

— Mollie Barnes

10:41 a.m.

Gov. Mike Dunleavy met with President Donald Trump this morning in Anchorage, as Air Force One stopped for a refuel.

.@realDonaldTrump thanks for visiting Alaska today. We can’t wait to have you back. pic.twitter.com/5jYBBLW040— Governor Mike Dunleavy (@GovDunleavy) February 28, 2019

— Mollie Barnes

10 a.m.

Sen. Natasha Von Imhof, R-Anchorage, discusses one slide that shows different returns on investments by quarter. She says one quarter can create several billion dollars of change collectively among all the funds.

“Eventually if our earnings reserve account gets transferred out, we will have less of a cushion collectively to address medium returns if we have a prolonged recession in the market,” Von Imhof says. “If you couple that with low oil prices, we’re in a heap of hurt. Volatility matters, and it’s very material.”

She says this is why it’s important to maintain cushion in the earnings reserve so that the state can address needs if the equity market goes through several bad quarters in a row.

— Mollie Barnes

9:47 a.m.

Now they’re discussing various investment performance.

“My general belief is that risk gets rewarded over time. You should get paid for the risk that you take. On that state side we take that risk in the public market,” says one staff from the Department of Revenue.

9:28 a.m.

Now they’re looking at a graph of what cash outflow reduction of $1.6 billion might look like.

“This puts in perspective what is the appropriate size, we know the Constitutional Budget Reserve is a shock absorber, and it is under $2 billion now. What is the appropriate size of the CBR, how low can we let it go and still be comfortable?” Tangeman asks.

— Mollie Barnes

9 a.m.

Senate Finance has started their morning meeting. The Commissioner of the Alaska Department of Revenue, Bruce Tangeman, is discussing state cash flows.

“We have a very seasonal flow to our cash,”Michelle Prebula, an investment officer with the Department of Revenue.

— Mollie Barnes