Sen. Bert Stedman, R-Sitka, spoke to the Empire on Monday, June 14, 2021, about the final budget proposal for the state which he helped craft. Some lawmakers said they felt bullied by the budget's contents. (Peter Segall / Juneau Empire)

Lawmakers decry ‘bully tactics’ in budget proposal

PFD still at the center of division

The proposed budget released by a legislative committee Sunday got strong pushback from lawmakers, throwing into question whether there are enough votes for it to pass.

The proposal allocates a Permanent Fund Dividend of $1,100 but splits the funding sources for the payment so that two votes are required for the full amount.

One of those fund sources is the Constitutional Budget Reserve of the Alaska Permanent Fund which requires a three-quarter vote in both bodies to access, or 15 Senators and 30 Representatives. Neither body has a caucus that can muster enough votes and reaching the high threshold typically involves negotiations.

Alaska uses an accounting mechanism known as “the sweep,” which at the end of each fiscal year empties certain state accounts into the CBR. Without the three-quarter vote to reverse the sweep, several critical state programs, such as the Power Cost Equalization and the Alaska Performance Scholarship, will remain unfunded. In that scenario, the PFD amount would also drop down to $525.

The budget bill passed by the Senate included a PFD of $2,300, following a formula currently being advocated by the governor. But that amount would require an overdraw on the Earnings Reserve Account of the Permanent Fund, which several lawmakers of both parties strongly oppose.

Many Republican lawmakers and the governor have stepped away from a demand the dividend be paid according to a statutory formula, and offered the $2,300 amount as a compromise. Lawmakers opposed to overdrawing the ERA had already proposed a dividend of roughly $1,000 in an earlier version of the budget.

Not long after the committee’s proposal was released lawmakers from both parties took to social media to condemn the tactics. On Facebook, Rep. Garan Tarr, D-Anchorage, called the move “manipulation” and said it was disappointing lawmakers had not consulted with the Republican minority in the House.

“Since the House Republican Minority has been working closely with (Gov. Mike Dunleavy) all session I won’t be surprised at all if they do not give the three-quarter vote, leaving the piddly $500 PFD, and then (Dunleavy) will veto it to try and force the legislature to actually do our job and address this in the August Special Session.”

Dunleavy himself voiced his disappointed, saying in a Twitter post, “once again the PFD is a political football subject to the whims of politicians. This is further proof we need to protect the PFD within AK’s constitution.”

Big Lake Republican Rep. Kevin McCabe, posted an image to Facebook Monday reading “Bring. It. On” with a background of skulls.

House Minority Leader Cathy Tilton, R-Wasilla, said on social media she would not capitulate to bully tactics, and that the committee report was ignoring the wishes of one of the fastest growing regions of the state.

“I have no desire or intent to shut down state government, but I also have no desire or intent to let other regions of the State hold us hostage,” Tilton said, adding that she and other Republican lawmakers were willing to negotiate.

Sen. Bert Stedman, R-Sitka, co-chair of the Senate Finance Committee and one of the members of the conference committee, said the committee funded the state’s capital budget almost exactly as requested by the governor and had allocated as much for the dividend as possible after doing so.

But Stedman said there were members of the Legislature that wanted to end the PCE program, which was something he and several other lawmakers refused to support.

“There is a significant group within the Legislature that wants to not support a reverse sweep,” Stedman said Monday in an interview with the Empire. “They want to liquidate PCE, and they’re playing rural basic energy against the dividend.”

Stedman said Alaska’s other regions such as the Railbelt have received billions in subsidies for their power, much of which comes from physical assets like dams, which can’t be easily removed. Ending the PCE program was not just bad policy, he said, but could lead the state into litigation.

“We need to move past that issue,” Stedman said of ending the PCE program.

Once lawmakers pass the budget, it must be signed by the governor who can veto certain items as he did two years ago. The governor’s office previously told the Empire if the budget is passed by June 18, the administration will be able to sign the document before automatic layoff notices are sent to state employees.

Both bodies are scheduled to meet at 10 a.m. Tuesday but have until the official end of the special session on Friday to pass a budget. If lawmakers don’t pass a budget, several state programs will remain unfunded until they do, either in the second special session scheduled for August or an entirely new special session.

• Contact reporter Peter Segall at psegall@juneauempire.com. Follow him on Twitter at @SegallJnuEmpire.

More in News

The Homer Spit is evacuated during the July 28 tsunami warning at about 10:50 p.m. (Photo by Sarah Knapp)
Tsunami warning downgraded to advisory for Homer, Anchor Point, Seward

Earthquake of 8.1 near Perryville prompted initial warning.

The Homer Spit is evacuated during the July 28 tsunami warning at about 10:50 p.m. (Photo by Sarah Knapp/Homer News)
Mag 8.2 earthquake rattles Gulf Coast, triggers tsunami warning

Lara Hildreth and Cindy Buchanan never expected their vacation would end in… Continue reading

Jan Keiser, Homer Public Works director, testifies during the Homer City Council Committee of the Whole meeting on July 26 in the Cowles Council Chamber. (Photo by Sarah Knapp/Homer News)
Cowles Council Chambers ready for use

After 10 months of renovation work, the Cowles Council Chambers are ready for use.

From left to right, Ashley Laukhuf, Kristin Armstrong, Nick Hansen and Kyle Barnes pose for a photo earlier this month on Inspiration Ridge Preserve near Homer, Alaska. The graduate students with the University of Michigan, Ann Arbor, were doing research with the School for Environment and Sustainability. (Photo by Nina Faust)
Grad students help Coastal Studies on land survey

Collaboration with University of Michigan, Center for Alaskan Coastal Studies helps to better understand ecology of Inspiration Ridge.

People wait in cars to get COVID-19 testing or vaccinatioins on Tuesday, July 27, 2021, at the South Peninsula Hospital COVID-19 site on Bartlett Street in Homer, Alaska. On Tuesday morning about 10 people waited to be helped, part of a recent uptick in testing and vaccination on the Southern Kenai Peninsula. (Photo by Michael Armstrong/Homer News)
COVID-19 surge continues

‘They’re getting sicker this time around’

The Homer City Council met in person for the first time in the newly renovated Cowles Council Chamber on July 26. (Photo by Sarah Knapp/Homer News)
Council returns to chambers, gets to work

Council overrides mayor’s vetoes in budget, votes down term-limit proposal.

Terry Eubank (left) and Paul Ostrander (right) address the Kenai City Council during a budget work session on Saturday, April 24, 2021 in Kenai, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
‘Untapped potential:’ Kenai looks to revive waterfront, develop business community

The City of Kenai is preparing to move forward with projects aimed… Continue reading

Gavel (Courtesy photo)
Judge hears arguments in budget effective date suit

Superior Court Judge Herman Walker Jr. heard arguments in Anchorage

The Serenade of the Seas arrived in Juneau early Friday morning, seen here moored downtown. The Royal Caribbean cruise ship is the first large cruise ship to come to Juneau since the pandemic caused the cancellation of the 2020 cruise ship season and delayed the 2021 season. (Michael S. Lockett / Juneau Empire)
They’re back: Large cruise ships return to Southeast Alaska

Juneau’s first large cruise ship since start of the pandemic arrived today.

Most Read