With big questions remaining, Alaska Legislature’s second special session quietly ends

JUNEAU — A special session that began with controversy and division will end Tuesday with no further legislative action.

The Alaska House of Representatives and Alaska Senate have canceled scheduled meetings, meaning the second special session of the 31st Alaska Legislature will reach its 30-day limit at midnight Wednesday morning.

Solutions to the state’s four major fiscal problems are or will soon be in the hands of Gov. Mike Dunleavy. Any decision on a third special session also rests in the hands of the governor.

A majority of the Legislature’s 60 members are interested in changing the traditional formula used to pay the Permanent Fund dividend, but they are unable to do so unless it is on the agenda of a special session (or they wait until the start of the regular session next year). Speaker of the House Bryce Edgmon, I-Dillingham, said lawmakers lack the 40 votes needed to call themselves back into session.

The governor told reporters last month he is uninterested in discussing a change until a $3,000 dividend is paid this year. Lawmakers have approved a $1,600 dividend.

Where do the vetoes stand?

Alaska lawmakers failed to overturn Dunleavy’s decision to veto $409 million from the state’s operating budget during the special session. (Another $30 million was removed from K-12 education because of disagreements about the constitutionality of the funding. A lawsuit is underway.)

The vetoes include the elimination of the state’s senior benefits program, cuts to Medicaid and the University of Alaska, and the end of the Ocean Ranger cruise ship pollution inspection program.

After lawmakers’ failure to overturn the vetoes, the House voted 23-15 and the Senate voted 17-1 to approve House Bill 2001. That bill would add funding back into the budget but still accept a $20 million cut to the University of Alaska and $3.29 million in vetoes to other programs, mostly travel expenses for various state agencies.

HB 2001 has not yet been sent to the governor. When it is sent to his desk, he has 20 days, excluding Sundays, to sign it into law, allow it to become law without his signature, or veto all or part of it.

If he vetoes all or part of HB 2001, an act that would restore his prior vetoes, the Legislature would be allowed to try to overturn the governor’s vetoes. That overturning decision would take place in the first five days of the next special session (if there is one) or in the first five days of the regular session in January.

Where does the dividend stand?

Also in House Bill 2001 is a provision paying a $1,600 Permanent Fund dividend. The governor has repeatedly said he prefers to pay a $3,000 dividend, but under the state constitution, the governor can only veto spending, not restore it.

The governor could veto the $1,600 dividend and call lawmakers into another special session. He could accept the $1,600 amount as-is. He could accept the $1,600 amount and push for a second, supplemental appropriation. He could also veto the amount and not replace it, meaning no dividend.

Where does the capital budget stand?

The state’s capital budget went unfunded during the regular session and first special session because of a dispute over the amount of the dividend. Because the capital budget was written to be paid-for from the state’s Constitutional Budget Reserve, it required two-thirds of the House and two-thirds of the Senate to vote in favor of it.

Members of the House Republican minority initially declined to vote for the budget, saying they would not do so until the Legislature approved a $3,000 dividend.

That did not happen, and with more than $1 billion in federal matching funds at stake, enough members of the minority voted in favor of Senate Bill 2002, a fully funded capital budget.

Where does the reverse sweep stand?

Part of the debate over the capital budget was a particular section known as the reverse sweep. That clause prevents 54 specific savings accounts from being automatically drained into the Constitutional Budget Reserve at the July 1 start of the fiscal year.

Without House Republican support, the state began the automatic process of draining those funds, an act that suspended college scholarship funds, subsidies for rural electricity, subsidies for vaccine purchases, and dozens of other programs, including the state’s new tough-on-criminals legislation.

Senate Bill 2002 has been sent to the governor, who said last week he will not veto the reverse sweep section. It is not clear whether he will veto anything else in the bill.