The Alaska Legislature is entering the final week of its 30-day special session with the biggest item of the year still unresolved.
The ball is largely in the court of the Alaska House of Representatives, however, as the Senate has largely adopted a wait-and-see policy to determine what the divided House can pass before next Tuesday.
At the top of the agenda in the House is a bill that would divert the investment earnings of the Alaska Permanent Fund to pay for state services and partially erase the state’s multibillion-dollar deficit.
Senate Bill 128 was approved by the Senate last week and referred to the House Finance Committee on Monday. The committee will meet at 8:30 a.m. Tuesday to hear the bill. SB 128 would cap Alaska Permanent Fund Dividends at $1,000 and divert about $1.8 billion per year (at present Permanent Fund values and oil prices) from the earnings of Permanent Fund investments to state operations.
The bill is the largest single piece of a 13-part comprehensive budget fix proposed by Gov. Bill Walker and thoroughly altered by the Legislature, and is encountering opposition from the right and the left.
[Overdue Legislature is trying to reach resolution.]
In a brief technical floor session on Monday, the Senate adjourned until Thursday morning. The House, meanwhile, has meetings scheduled throughout this week and is expected to continue meeting until the constitutionally mandated limit of the special session.
Every legislator in the House has heard from constituents worried about the bill’s impact on the dividend. Without the bill, the dividend is expected to be about $2,000 this year. With the bill, that figure is halved.
On the right, the bill is being opposed by lawmakers who oppose government spending.
“Government has a spending problem not a revenue problem. We must continue to reduce the footprint of government,” Rep. Tammie Wilson, R-North Pole, told the Fairbanks Daily News-Miner in response to an email. “The PFD belongs to Alaskans.”
[Senate votes to halve dividend, spend Permanent Fund earnings on state operations.]
On the left, the bill is opposed by lawmakers who say it will let oil companies off the hook and make seniors and children suffer through inevitable spending cuts.
In a column submitted to the state’s newspapers, Rep. Les Gara, D-Anchorage, said provisions in the bill call for the Permanent Fund draw to decrease any time oil prices reach a certain threshold. That means the state will never see its revenue outpace inflation, and inflation will naturally rob the state of any ability to pay for services including public safety and education.
“This revenue — the bulk of what will fund our budget — will shrink every year in real dollars,” Gara wrote.
Before facing a floor vote, SB 128 needs to gain the approval of the House Finance Committee.
“We’ll see if they’ve got enough numbers to move it out of Finance and on to the floor,” said Speaker of the House Mike Chenault, R-Nikiski, on Monday.
[Walker’s 13-point deficit plan falters after four months in Legislature.]
Chenault said he isn’t certain what the next week will bring.
So did House Minority Leader Chris Tuck, D-Anchorage.
“I really don’t know,” he said. “It’d be nice if the Senate held some hearings … on any of the revenue bills.”
Those revenue bills include tax increases on gasoline, fisheries and mining. All three bills are awaiting a vote on the House floor, but Chenault said Alaskans shouldn’t expect a vote on Tuesday.
“No. That’s not my plan to move those out yet,” he said.
The future of those bills is in the hands of Gov. Bill Walker and his staff, who have been calling lawmakers and asking for their support on various bills.
Chenault has previously said that he will bring the bills up for vote when the governor asks him to do so.
“We’ll see if they can garner enough support,” Chenault said. “They’re ready. They’re in position.”
• Contact reporter James Brooks at james.k.brooks@juneauempire.com.
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