Legislature update: House panel introduces legislation to reverse governor’s vetoes and fix other gaps in budget

This story has been updated with a new article: Impasse continues as Alaska lawmakers push different visions for budget, Permanent Fund dividend

As the Alaska Legislature’s special-session impasse entered a second week, members of the House Finance Committee introduced new draft legislation to reverse Gov. Mike Dunleavy’s budget cuts, fix problems with the state capital budget and pay a “surplus” Permanent Fund dividend of about $929 per person.

Members of the coalition House majority envision the legislation as a means to solve the state’s budget impasse, but Rep. Neal Foster, D-Nome and co-chairman of the House Finance Committee, said it is more of a “starting point” than a final proposal. Members of the Republican House minority opposed the introduction of the new legislation and questioned its legality.

“This is just a starting point. I don’t think there are many people who believe we’re going to have a $929 PFD,” Foster said.

Any veto-reversing legislation is itself subject to a gubernatorial veto and would require the governor’s support or the approval of 45 lawmakers.

House Bill 2001, as the proposal is known, pays a dividend equivalent to the amount left over in the state’s budget once services are paid for. Without the governor’s vetoes, the state’s budget is balanced if the dividend is about $900. With the vetoes, the budget is balanced under a dividend slightly smaller than $1,500.

Paying a traditional dividend of $3,000 would require further cuts, breaking the Permanent Fund spending limits approved last year, or spending from state savings accounts, such as the Constitutional Budget Reserve.

“Really, it just shows that if you restore all of the vetoes — and we put the capital budget in there — what money is left over for a PFD?” Foster said of the legislation.

The new draft was introduced during a meeting of the Finance Committee in Anchorage, a compromise between the Wasilla and Juneau locations favored by different legislative factions last week. Of the committee’s 11 members, nine were present — six from the Juneau bloc and three from the Wasilla group.

“I’m not buying what they’re selling,” said Rep. Colleen Sullivan-Leonard, R-Wasilla, in a Facebook post about the meeting, and she followed through on that comment by questioning the legality of the new legislation.

Under the Alaska Constitution, the governor controls the agenda of a special session that he calls. Legislators need 40 votes — two-thirds of their 60 members — to call their own special session and set the agenda that they choose.

Dunleavy placed only one item on the agenda of the current special session: the Permanent Fund dividend.

With that in mind, Sullivan-Leonard questioned whether it is legal for lawmakers to include veto-reversing language in the bill.

“Again, I challenge the legality of this,” she said.

Foster responded by saying that because the amount of the dividend in the bill is listed as surplus, paying “a surplus Permanent Fund Dividend … requires that the Legislature address the funding for state services.”

Speaking after the morning Finance Committee meeting, he said it’s possible that the coalition House majority could change its position later on.

“Maybe in the end we do accept some of the cuts, but without this bill, that’s a nonstarter,” Foster said. “This bill allows us to fully start the process and maybe, potentially, accept some of the cuts.”

The committee voted 6-3 to consider the new legislation, with “no” votes coming from Sullivan-Leonard; Rep. Cathy Tilton, R-Wasilla; and Rep. Kelly Merrick, R-Eagle River.

The House Finance Committee began its meeting at 11 a.m., with public testimony to start at 2 p.m. and continuing until 7 p.m. on the idea of reversing the vetoes and a surplus dividend. Those interested in offering testimony can do so in person at the Anchorage Legislative Information Office, 1500 W. Benson Blvd., or by phone. If calling from Juneau, the number is 907-586-9085. If calling from Anchorage, it’s 907-563-9085. If calling from elsewhere, use 844-586-9085.

Board of Regents meets today

At 1 p.m., the University of Alaska Board of Regents will meet to consider a $135 million reduction to its budget. Dunleavy vetoed $130 million from the university system’s budget atop $5 million in cuts approved by the Legislature this year.

That meeting could result in a declaration of “financial exigency,” which allows the university system to take major action, including the firing of tenured teachers.

The Board of Regents meeting will be streamed at https://www.alaska.edu/bor/live/.

Recall backers delay launch

According to a message posted on social media, a group of Alaskans upset with the governor’s budget vetoes has delayed the launch of a petition seeking the recall of the governor. According to the announcement, further legal review will take place before the organizers begin gathering signatures Aug. 1.

Under state law, the petitioners would have to gather 28,501 signatures to have the petition considered for certification by the Alaska Division of Elections. If the division certifies the petition, those seeking recall would have to gather 71,252 signatures to hold the recall election.