House votes for higher dividend, but deal is far from complete

The Alaska House of Representatives has voted to approve a $2,200 Permanent Fund Dividend for this fall, a sign that it is abandoning a long-term deficit solution in favor of a one-year budget needed to avert a statewide government shutdown.

The 26-14 vote came Wednesday as lawmakers debated amendments to the state’s capital construction budget. The higher PFD amount was Amendment No. 1.

“At this point, it looks like we may be leaving this building with only a budget and without a comprehensive plan,” said Rep. Gabrielle LeDoux, R-Anchorage and the sponsor of the amendment.

“Without this amendment, we are headed for a budget that reduces the people’s PFD. And to this, Mr. Speaker, I say not only no, but hell no,” she added.

Earlier this year, the House approved a $1,250 dividend as part of its statewide operating budget proposal, one that was tied to a comprehensive fix for the state’s $2.7 billion annual deficit.

Wednesday’s vote was along neither caucus nor party lines. Twelve Democrats voted for it, as did 14 Republicans. Two independents voted against it, as did five Democrats and seven Republicans.

Rep. David Eastman, R-Wasilla, joined others in support of the amendment.

“If we are not going to change the law, I think it is incumbent upon us to follow the law,” he said in a floor speech.

From Juneau, Rep. Sam Kito III, D-Juneau, voted against the higher dividend. Rep. Justin Parish, D-Juneau, voted for it.

“I’d rather not say anything … until we’re done with the bill,” Kito said as more amendments were presented.

Parish was more willing to discuss his vote.

“As part of a fair and comprehensive plan, I would support using part of the dividend,” he said. “However, if we’re not asking anything of the oil industry and if we’re not asking anything of the 20 percent of nonresident workers in the state, I can’t in good conscience ask every one of my constituents … to contribute $1,100 to state government and the oil industry.”

Wednesday’s vote is a sign that members of the coalition House Majority are willing to make a short-term deal to avoid a government shutdown.

If the Legislature fails to pass a budget — and find a way to pay for it —before July 1, many state services will shut down for lack of funding.

[State shutdown would affect every man, woman and child in Alaska — including the dead]

The Legislature’s first special session ends on Friday, and it appears that even if a compromise is in the works, a second special session will be needed to finish it.

Until Wednesday, the House Majority had said that it was unwilling to accept anything less than a comprehensive fix to the state’s deficit. Speaker of the House Bryce Edgmon, D-Dillingham, has repeatedly pointed out that 2018 is an election year, and lawmakers are reluctant to make difficult decisions (such as raising taxes) in an election year.

Wednesday’s vote is the first sign that members of the House Majority may deem a shutdown worse than a persistent deficit. The state can fully fund its operations from savings for one more year without consequences to the dividend.

Wednesday’s vote on the dividend has a long road to become reality. The Senate must approve the higher dividend, and Senate President Pete Kelly, R-Fairbanks, appears to think negatively of the idea.

In a statement released after the House vote, he said the higher dividend adds more than $800 million to the state’s budget.

He called the addition an attempt by the House Majority to encourage passage of an income tax, even though half the majority didn’t vote for the higher dividend and many members of the Republican minority did vote for it.

Even if the Senate were to agree with the higher dividend, the idea must survive Gov. Bill Walker, who vetoed half of last year’s dividend and could do so again.

Walker, at the time, said the state needed to prioritize a long-term fix to the deficit.

“Drawing down from limited savings to fund the budget is not a viable plan,” Walker said at the time.

• Contact reporter James Brooks at or call 419-7732.

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