Alaska Legislature roundup: Lawmakers inch toward Permanent Fund deal as fights brew over Native languages, expense checks

JUNEAU — A key Alaska lawmaker said Monday that legislative leaders are holding productive, private negotiations on a plan to help fix the state's $2.5 billion deficit, while separate skirmishes have erupted over Native languages and lawmakers' daily payments for lodging and food.

Lawmakers were hoping to finish their work by the end of this week, said Nome Democratic Rep. Neal Foster, a member of House leadership. But now, it "may be a few more days," because of some technical problems with the Legislature's plan to use the Permanent Fund to help balance the budget, he added.

Lawmakers began their second week of overtime Monday. A 2006 citizens initiative limited the annual legislative session to 90 days, but lawmakers have the flexibility to continue for an extra month under a separate deadline in the Alaska Constitution.

On the 98th day, their biggest tasks were still unfinished: settling on final plans for the state operating and capital budgets, and agreeing on a long-term proposal to fill the deficit.

The operating budget plan is stuck in a conference committee, where leaders of the largely-Democratic House majority and the mostly-Republican Senate majority are trying to reconcile their competing spending proposals.

And the capital budget has been sitting in cold storage in the finance committees in both chambers since Gov. Bill Walker's administration introduced it in January.

The leading proposal to fix the deficit, meanwhile, is showing its first signs of life in a year.

Like the budgets, the House and Senate each have competing plans to fill the budget gap with some of the investment earnings from the $65 billion Permanent Fund. But ideological differences between the two chambers' majorities have kept the legislation, Senate Bill 26, stalled in a separate conference committee since April 2017.

After three years of debate, and a steady decline in the balance of Alaska's savings accounts, most lawmakers agree that some amount of the Permanent Fund's investment earnings should go toward balancing the budget.

[Related: Without action by lawmakers, Alaska's main savings account will soon be empty. What will they do?]

But because those earnings also pay for residents' annual dividend checks, a deal on the legislation has been elusive. Different legislators have different conditions they want to be met before signing off on proposals that would cause dividends to be reduced: Many Republicans favor deeper cuts to state spending, while Democrats support higher taxes for oil companies and a new personal income tax that would ask the most of high-earners.

The two chambers have already reached a tentative agreement to spend $2.7 billion of the fund's earnings for the upcoming fiscal year, which starts July 1, on a one-time basis.

Some 37 percent, or $1 billion, would go toward a $1,600 dividend, while the rest of the cash would be spent on government services.

But Walker, and the fund's managers, are pushing lawmakers to establish a similar structure in SB 26 to guide the use of the fund in future years.

That would help managers decide when to buy and sell investments and make for a more stable annual budget process.

After nearly a year in hibernation, the conference committee on SB 26 met Saturday. Its members agreed to ask the full House and Senate for flexibility to negotiate on specific elements of the bill — including the amount of the annual withdrawal from the fund and the split between dividends and government.

Lawmakers expect to unveil proposed adjustments to the bill at its next meeting, likely within two days, said Foster, who sits on the conference committee. There's agreement between members over the major issues, like the size of the annual draw, but lawmakers are still trying to address a few "finer details," he added, declining to specify them.

They're also still talking about whether to dictate how the withdrawal should be split between dividends and government programs, or whether to leave future legislators flexibility to decide that each year, he said.

Meanwhile, other key pieces of legislation are advancing or are expected to advance soon, Foster said — such as the capital budget and a proposal to borrow money to pay off hundreds of millions of dollars in cash tax credits owed to oil companies.

"We've got good momentum. We want to try and work on closing out session here in a timely fashion," Foster said. "There's still some things that need to come together, but I think ultimately it's a good sign that we're looking at (SB 26)."

Alaska Senate downgrades Native languages problem from "emergency" to "urgent"

As lawmakers privately negotiate deals on the big-ticket financial bills, they're also still fighting over other legislation in public.

Among them is a proposal to highlight the plight of Alaska Native languages, many of which are disappearing.

House Concurrent Resolution 19, sponsored by Ketchikan independent Rep. Dan Ortiz, originally asked Walker, the governor, to issue an order declaring a "linguistic emergency."

But the Senate State Affairs Committee, chaired by Anchorage Republican Sen. Kevin Meyer, advanced a new version last week that downgrades the severity of the situation — asking Walker to recognize "the urgent need for language revitalization efforts."

"When you call 911 for an emergency, you usually don't think of languages. In our mind, this is a serious matter and an urgent matter, but it didn't rise to the level of an emergency," Meyer said in a brief interview Monday. "It wasn't an earthquake or a fire or somebody dying, which is what you usually think of when you think of the word 'emergency.'"

Ortiz said he'll accept the change "if that's what we need to do to get attention to the issue." But one Alaska Native supporter of the resolution, Lance Twitchell, called the adjustment a "big deal" and defended the use of the word "emergency."

There's a correlation between disappearance of native languages and problems like suicide and diabetes, argued Twitchell, assistant professor of Alaska Native languages at University of Alaska Southeast.

None of the Senate committee members are Alaska Native, and Twitchell said some of them are "talking in an area where they're tremendously unqualified." The deletion of the word "emergency," he added, "reflects a racist agenda," in which no other languages should be equivalent to English.

Committee rejects huge cut to legislators' expense payments

Another question being debated by lawmakers Monday was the future of their daily, $275 payments meant to cover their Juneau food and lodging expenses. The per diem payments currently cost the state more than $16,000 for each extra day the Legislature is in Juneau.

Lawmakers' payments, tied to federal guidelines, are far larger than those given to workers in the state's executive branch on similar long-term assignments. And Juneau Democratic Rep. Sam Kito III proposed Monday to slash them by 75 percent, in a move that was ultimately rejected by his colleagues.

Kito is not running for re-election this year in large part, he says, because of a separate plan approved earlier this year by a nonpartisan compensation commission — one that eliminates the payments entirely, but only for the three Juneau legislators.

Those three legislators, including Kito, had received payments three-fourths the size of their colleagues', even as they lived at home.

Kito's new proposal, taken up at a committee hearing Monday, is designed to make the payments "equitable" between the Juneau legislators and non-Juneau legislators, he wrote in a memo.

The plan approved by the compensation commission, he wrote in a memo, "results in legislators outside of Juneau receiving over $24,000 in tax-free compensation during the regular, 90-day session."

Kito declined to answer questions about his proposal before Monday's committee hearing. His colleagues on the committee — the joint House-Senate Legislative Council — rejected his plan in a 13-1 vote.

Last year, the House approved sharp reductions to legislators' expense payments. But the plan died amid opposition from the Senate.