Alaska lawmakers negotiate behind closed doors as budget, PFD deadlock continues

JUNEAU — Fueled by takeout pizza and cups of Capitol coffee, the leaders of the Alaska House of Representatives met behind closed doors for much of Tuesday, attempting to find a compromise for what Speaker of the House Bryce Edgmon, I-Dillingham, called the “four spears” confronting the state.

Members of the 16-member Republican House minority appeared to maintain their position in favor of a $3,000 Permanent Fund dividend and greater reductions in state spending, while the 23-member House majority coalition stayed close to its principles by backing a lower dividend and lesser reductions to spending that provides services for Alaskans statewide.

At the end of the day, both sides voted to adjourn until Wednesday, having taken no action on House Bill 2001, which addresses the dividend and $444 million vetoed from the operating budget by Gov. Mike Dunleavy, or on Senate Bill 2002, which would fix the state’s capital budget and the so-called “reverse sweep” vote.

Collectively, those four issues — divided between the two bills — have created a fiscal and leadership crisis that affects Alaskans statewide. Without agreement, there will be no Permanent Fund dividend this year and massive cuts to state services.

“We’re going to continue negotiations between the House minority and majority caucuses and we’re going to come back tomorrow with other attempts to craft a solution that both caucuses can support,” Edgmon said after the House adjourned for the day.

Negotiations Tuesday focused primarily on House Bill 2001, Edgmon said. That proposal, as currently written, would pay a $1,605 Permanent Fund dividend and provide money to reverse more than three-quarters of the $444 million vetoed by Dunleavy from the state operating budget.

Members of the House minority have been seeking to preserve more of Dunleavy’s vetoes and have been trying to garner support for a larger dividend.

“They’re looking for a few more cuts in 2001,” said Rep. Gary Knopp, R-Kenai and a member of the coalition majority.

The leaders of both House groups met several times in Edgmon’s office for closed-door discussions, then brought the negotiated details of those discussions back to the majority and minority caucuses for a yes-no decision.

For the members of the minority, walking the stairs between Edgmon’s second-floor office and House Minority Leader Lance Pruitt’s fourth-floor suite was an exercise in “shuttle diplomacy,” said Rep. DeLena Johnson, R-Palmer.

“Things are finally kind of starting to shake loose a little bit,” she said. “How long it will take, I don’t know.”

Outside the Capitol, the Federal Highway Administration offered a small piece of good news for Alaskans awaiting progress in the Legislature.

After an inquiry from the office of U.S. Sen. Dan Sullivan, the Federal Highway Administration’s chief congressional liaison confirmed that Alaska has until 2020 to come up with matching funds for hundreds of millions of dollars in federal aid.

The federal government’s fiscal year starts Oct. 1, explained liaison Tim Arnade, and the state becomes eligible for its federal highway aid at that point. As long as the state comes up with its matching funds before August 2020, it receives the full amount of federal highway aid. If it doesn’t come up with the money in time, the federal aid is redistributed to other states.

Those matching funds are only one part of the capital budget, however. Senate Bill 2002, which would fix the capital budget, deals with dozens of programs, including substance abuse treatment, the state ferry system and college scholarship funding.

The House of Representatives twice failed to pass that legislation earlier this week and under legislative rules is allowed only one more re-vote.

It remained unclear Tuesday when that re-vote would take place.