For Alaska lawmakers, legislative session’s end may be decided by Permanent Fund (again)

Protections for the Alaska Permanent Fund are becoming the crux of negotiations to end this year’s legislative session.

In a Monday interview, the lead House negotiator for a bill limiting the Legislature’s ability to spend from the fund said that measure is being linked to other legislative priorities, such as increased education funding.

“Everything’s intertwined,” said Rep. Neal Foster, D-Nome. “We are looking at now, also, the possibility of tying things together.”

Foster is the House chairman of the conference committee in charge of Senate Bill 26. While much of the $65 billion Alaska Permanent Fund is constitutionally protected, about $15 billion of the fund does not have that protection.

All that is needed to spend that money is a simple majority (21 members) of the House and a simple majority of the Senate (11 members).

SB 26 tries to change that by limiting how much money the Legislature can spend from the fund. The Senate passed one version of SB 26 last year, the House another. If the bill is to become law, legislators need to come up with a compromise that can be approved by both bodies.

Until Saturday, the conference committee in charge of drafting that compromise had not met in more than a year. Now, the members of that committee are asking for greater latitude as they make an agreement.

“We’ve scheduled one meeting, so we’re optimistic … that we can enter into hard negotiations and figure out a path of similar interests to provide structure to the Permanent Fund,” said Sen. Anna MacKinnon, R-Eagle River and the lead Senate negotiator.

Finding similar interests among the six members of the conference committee is one thing: Getting enough votes in the House and Senate to approve the compromise bill is another.

“There is a grand compromise of a bunch of different things that are being talked about,” MacKinnon said, but a proposal hasn’t been made public, and MacKinnon said members of the Senate Majority haven’t discussed the topic.

Foster, meanwhile, said he believes a vote on SB 26 could come about to meet requests by the 18-member House Republican Minority, which now holds a commanding position in budget negotiations. As drafted, the state budget has a deficit of about $2.4 billion. Of that, $700 million will be covered by the Constitutional Budget Reserve (CBR), which requires a three-quarters vote in the House and a three-quarters vote in the Senate.

That means the 21-member House Majority needs the votes of the minority to pass the budget.

Foster said the minority has requested a smaller operating budget, a vote on SB 26 and a vote on a $1 billion oil and gas program in exchange for the vote to use the CBR. The House Majority, meanwhile, wants support in the Senate for increased education funding and fewer cuts to the state’s operating budget.

Foster’s fellow House Majority negotiator, Rep. Paul Seaton, R-Homer, declined to comment for this story and referred questions to Foster.

House Minority Leader Charisse Millett, R-Anchorage, said Foster’s belief isn’t accurate.

“We are a divided caucus on 26,” she said. “What our priority is is to have budget reductions — and we are continuing to work on budget reductions — and we’d like to see the oil tax credits, either bond or statutory payment obligation, done.”

Beyond those, she said a firm spending limit is the minority’s No. 1 focus.

Millett pointed out that members of the minority aren’t required to vote as a group, and lawmakers have different opinions on what they want. She added that her caucus isn’t the only one divided: The majority itself has long wanted an income tax and higher taxes on oil and gas production, and SB 26 could offer an opportunity to advance that idea.

“What actually happens in the end, we don’t know for sure,” Foster said.

• Contact reporter James Brooks at or 523-2258.

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