Members of the Alaska House Finance Committee continue to express uncertainty and hostility toward a measure that would use money from the earnings of the Alaska Permanent Fund to fund state services.<\/p>\n
The committee held a hearing Tuesday morning to consider Senate Bill 128, which promises to roughly halve Alaska\u2019s multibillion-dollar annual deficit by drawing 5.25 percent of the Alaska Permanent Fund annually.<\/p>\n
Under current values of the Permanent Fund, that would mean $1.92 billion from the Permanent Fund\u2019s earnings reserve would go to state government.<\/p>\n
As a side effect, the bill would halve the annual Alaska Permanent Fund Dividend.<\/p>\n
\u201cI think everybody in this building can count votes,\u201d said Rep. Les Gara, D-Anchorage. \u201cEverybody knows the votes are not there for this bill as written.\u201d<\/p>\n
Gara later clarified that he might vote for the bill if it was amended.<\/p>\n
SB 128 passed the Senate earlier this month, but in order to become law it must be approved by the House Finance Committee, then survive a vote of the full House. Gov. Bill Walker has indicated he will sign the bill if it reaches his desk in its present form.<\/p>\n
Speaking Monday on KINY-AM\u2019s Action Line, Rep. Cathy Mu\u00f1oz, R-Juneau, said she believed the bill had five of the six votes needed to advance from the finance committee.<\/p>\n
After Tuesday morning\u2019s hearing, however, she isn\u2019t so sure.<\/p>\n
Lawmakers have received a tidal wave of emails, calls and other contacts from constituents concerned about the bill\u2019s effect on the Dividend, and the effect of those contacts was apparent.<\/p>\n
\u201cFrom what I can perceive, the public isn\u2019t fully accepting it,\u201d said Rep. Bryce Edgmon, D-Dillingham, who explained that he\u2019s received a \u201cvisceral\u201d response to the bill. \u201cIt seems to me that we don\u2019t have the consent of the public.\u201d<\/p>\n
SB 128 calls for a $1,000 dividend over the next three years, effectively saving $700 million per year. Without the bill, the dividend is expected to be about $2,000.<\/p>\n
\u201cWe are deciding who to give this $700 million to: Do we give it to the public, or do we give it to those who are associated with the government?\u201d said Rep. Lance Pruitt, R-Anchorage, in a rhetorical argument.<\/p>\n
Revenue Commissioner Randall Hoffbeck told lawmakers that he understands what they\u2019re hearing, but he\u2019s asking for their support anyway.<\/p>\n
\u201cAs far as the political winds, I think your statements are correct. I think there is a lot of political headwinds out there,\u201d he said, but \u201cWhat option do we have? If we don\u2019t face those headwinds now, what options do we have?\u201d<\/p>\n
In Tuesday\u2019s hearing, Hoffbeck said unless the Legislature makes a significant change this year or in next year\u2019s budgeting process, the state will exhaust the remains of its Constitutional Budget Reserve. It will then begin to spend from the Permanent Fund earnings reserve, the same account that pays dividends.<\/p>\n
\u201cIn another two years, (that) would be exhausted. At that time, the projection is Permanent Fund Dividends would go away. That\u2019s in about 2023,\u201d said David Teal, director of the Legislative Finance Division, which assists the Legislature on financial matters.<\/p>\n
Under SB 128, \u201cDividends drop to $1,000 now and would continue to be paid for the foreseeable future,\u201d Teal said.<\/p>\n
The bill would not close the state\u2019s deficit entirely, but it would stretch the state\u2019s remaining savings and allow the Legislature time to make further cuts, raise taxes or allow oil prices to rise.<\/p>\n
Several legislators asked what might happen if the House simply punted and didn\u2019t vote on the bill.<\/p>\n
\u201cI would expect that we might visit again,\u201d Hoffbeck said, implying that Walker would call legislators into another special session.<\/p>\n
Rep. Steve Thompson, R-Fairbanks and co-chairman of the finance committee, responded, \u201cCalling us back isn\u2019t going to change our constituents\u2019 attitudes or the way we\u2019re going to vote.\u201d<\/p>\n
If the implication of another special session was a stick, Hoffbeck also offered lawmakers a carrot, saying the administration is flexible on the amount of the dividend in the coming year, and in the timing of that special session.<\/p>\n
The session could even be a lame-duck one, held after the November general election, he implied, but there would be consequences.<\/p>\n
\u201cThe dynamics don\u2019t change between now and November, except the (budget) consequences get worse,\u201d he said.<\/p>\n
\u2022 Contact reporter James Brooks at james.k.brooks@juneauempire.com.<\/p>\n","protected":false},"excerpt":{"rendered":"
Members of the Alaska House Finance Committee continue to express uncertainty and hostility toward a measure that would use money from the earnings of the Alaska Permanent Fund to fund state services. The committee held a hearing Tuesday morning to consider Senate Bill 128, which promises to roughly halve Alaska\u2019s multibillion-dollar annual deficit by drawing […]<\/p>\n","protected":false},"author":426,"featured_media":8247,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_stopmodifiedupdate":false,"_modified_date":"","wds_primary_category":4,"footnotes":""},"categories":[4],"tags":[230],"yst_prominent_words":[],"class_list":["post-8246","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-state-news"],"_links":{"self":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts\/8246","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/users\/426"}],"replies":[{"embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/comments?post=8246"}],"version-history":[{"count":0,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts\/8246\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/media\/8247"}],"wp:attachment":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/media?parent=8246"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/categories?post=8246"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/tags?post=8246"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/yst_prominent_words?post=8246"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}