Alaskans have every right to be frustrated as the Legislature enters June still in session without a final budget, let alone a comprehensive plan to end this yearly cycle of uncertainty in place. I can assure you that I’m equally as frustrated by the gridlock.
While it’s tempting to cast blame for the situation we find ourselves in yet again, I want to reiterate the House of Representatives’ commitment to finding a solution. That includes members from both the majority and minority. We’re here and ready to work.
Further, policymakers have significantly more points of agreement than disagreement these days, which wasn’t always the case.
Two short years ago, the State of Alaska was spiraling as the Administration and a large contingency of lawmakers questioned whether we should continue funding basic functions of state government: operating Pioneer Homes, plowing vital roads on the Kenai Peninsula, connecting coastal Alaska with a ferry system, investing in our future through the university system, and more.
Today, there is broad agreement that the level and type of services is close to where the State needs to be.
So, why are we still here?
The answer is the PFD.
I want to be clear that I support as large of a PFD as we can afford, but it must be balanced against our ability to provide essential services, whether it necessitates taxes, as well as the longevity of the fund itself.
There are plenty of different ideas regarding what the dividend program should become, but as with the question of spending, we’re getting closer to a consensus.
Nearly every elected official — including Gov. Dunleavy — now accepts that we cannot afford to continue following a formula that would overdraw the fund, decimate essential services, and rob Alaskans of our last pot of savings.
What the disagreement now boils down to this year is whether to spend more than we can afford “just this once.”
The reason the House Coalition cannot support that approach is simple. If we take an unsustainable amount out of the Alaska Permanent Fund once — to pay the largest dividend in history, as the governor proposes, or to subsidize spending we can’t afford — future legislatures will follow suit and delay tough decisions until the spendable portion of the permanent fund is depleted. Then the only option will be massive taxes and crippling cuts to essential services.
What’s the difference between paying a $1,000 dividend suggested by the Senate Finance Committee versus the $2,350 in line with the governor’s latest proposal?
Every $1 billion we remove from the permanent fund today increases the deficit by $50 million every year into the future — meaning that a one-time decision to pay the largest dividend in the history of the program, rather than $1,000 per Alaskan, would leave $75 million less to pay for dividends, schools, roads, and troopers every year, forever.
While we are getting closer to agreement on a fiscal plan, it is clear today that neither the political will nor fiscal reality support the governor’s current proposal. In order to get to 11 votes in the Senate and 21 votes in the House, we need to address the $1 billion hole the plan would leave in the budget.
That being said, I applaud the governor for moving the conversation forward and agree that the time to act is now. His proposal will serve as a strong starting point for discussions this special session, as well as the next.
I am in daily meetings with the governor, as well as House and Senate Leadership to find a permanent solution as soon as possible. Alaskans deserve nothing less.
Rep. Louise Stutes (R-Kodiak) is speaker of the House of Representatives, leading a bipartisan coalition. She has served in the House since 2016 and previously worked in the private sector as a commercial fisherman and bar owner.