At hearing, Alaskans call for compromise as Legislature remains split over the dividend

At a legislative hearing on Monday, many Alaskans were divided over payment of an Alaska Permanent Fund Dividend payment, with some calling for a full, $3,000 payment while others supported a smaller amount and a reversal of Gov. Mike Dunleavy’s $444 million in vetoes.

And some speakers supported new taxes as a way to pay both a large dividend and protect services.

If the dividend is reduced below $3,000, poor people with large families will be hit the hardest, said Judith Rittenberg of Trapper Creek, who phoned into the hearing. Even infants who are eligible for the dividend are essentially being taxed under that plan, she said.

“There needs to be an income tax, or a flat tax or some kind of tax. Oil companies can be taxed. But stealing people’s PFD is not one (of the options)," Rittenberg said.

The five-hour hearing at the Anchorage Legislative Information Office was the first of five meetings this week for the Alaska House Finance Committee, as the Legislature struggles to find a way forward after efforts to override the vetoes failed last week. Tuesday’s meeting is set for the LIO in Wasilla, with public testimony scheduled for 2-7 p.m.

[Impasse continues as Alaska lawmakers push different visions for budget, Permanent Fund dividend]

The committee is taking testimony on House Bill 2001, which would pay a $929 dividend while restoring funding lost with the vetoes, if the Legislature can muster a 45-vote, veto-proof majority. That dividend is simply a starting point for discussion, said Rep. Neal Foster, D-Nome and the committee’s co-chairman.

“We’re trying to get to some middle ground,” he said.

More than 250 people signed up to speak at the hearing, a committee aide said.

The hearing lacked the large protests, usually dominated by veto opponents, seen outside other legislative meetings that followed the June 28 vetoes to the state operating budget.

This time, about 10 people stood outside with signs supporting the $3,000 dividend backed by the governor and some lawmakers. Those big-dividend supporters testified frequently on Monday, at least during the hearing’s early hours.

Molly Hayes, whose two young daughters stood by her side as she spoke, said no dividend is worth the pain Alaskans are already facing from the cuts, including the loss of services at homeless shelters.

“At this point, it feels like dirty money,” she said.

[Anchorage’s biggest homeless shelter closes during the day, braces for drastic budget cuts]

Many speakers said they’re already seeing stress in the economy from the cuts, including University of Alaska staff who expect to lose jobs following a $130 million cut to UA, and students who are losing scholarships and possibly degree programs. They urged lawmakers to reverse the cuts.

Caroline Storm, a self-employed architect in Anchorage, said business in the construction industry is slow and expected to get slower because of the cuts. She said she supports a full, $3,000 PFD payment, but also wants to see a reversal of most of the vetoes and a progressive income tax.

“The same people who need the PFD will also be harmed by the vetoes,” she said.

Paige Hall, from Wasilla, said the Legislature should pay a full, $3,000 dividend under the traditional formula. Her family has used past dividends under that formula to buy a boiler for their house, and pay for their children’s college. This year, her family plans to use the money to build a cabin for a homeless relative.

But she also doesn’t want to see services lost. She supports an income tax or a sales tax, she said.

“I’m not well off, but I’m ready to pay my fair share,” she said.

Verne Boerner, chief executive of the Alaska Native Health Board, said the state will lose at least at least $50 million in federal matching funds from the vetoes alone, after the governor cut $50 million from Medicaid services. The veto to Medicaid services comes atop a $70 million cut approved by the Legislature.

[A partial list of Gov. Dunleavy’s line-item vetoes]

Emily Olsen, a doctor from Anchorage wearing a white coat, told the committee the hit to Medicaid funding will lead to more homelessness and unnecessary deaths as medical services are lost. She said a physician friend is exploring leaving the state.

“The PFD has been used as a weapon to pit neighbor against neighbor,” she said. “We need a different source of income."

A man from Fairbanks who called in said he’s a Republican who would support an income tax if it helps pay for full dividend.

“Being a Republican, I know that sounds crazy, but I’m OK if everyone is paid,” he said.

Shelly Vendetti-Vuckovich of Anchorage told lawmakers that much of the testimony gave her hope. Until now, she hasn’t heard calls for a full dividend payment, a veto reversal and new taxes to help pay for services.

“It highlights the need for everyone to come together and work together and find a bipartisan solution,” 'she said.