Alaska House calls for $1,100 dividend; dispute over funds

JUNEAU, Alaska (AP) — The Alaska House passed legislation Tuesday calling for an $1,100 dividend to residents but there are different interpretations as to whether much of the money that would be used for the checks is available.

The bill, which passed 24-16, calls for spending $730.5 million, with $330 million of that from the statutory budget reserve fund, for a dividend that would be paid this year.

That's where a recent court decision and a failed vote earlier this year come into play.

The fund was long considered among the accounts subject to being swept into the constitutional budget reserve to repay it for money that’s been used from it. Lawmakers can reverse the sweep and restore funds to their original accounts but earlier this year failed to secure the votes to do so.

Megan Wallace, director of Legislative Legal Services, told a Senate committee Monday a recent court decision suggests the statutory reserve is not subject to the sweep.

Gov. Mike Dunleavy's office contends otherwise.

“The fund has been swept,” Dunleavy spokesperson Jeff Turner said by email. He said the Legislature can change that with a three-quarter vote.

The dividend would be about $585 if the statutory budget reserve funds were deemed swept, according to the Legislative Finance Division director.

The bill, which also dealt with other budget items, including oil tax credits, still must go to the Senate for consideration. Senate President Peter Micciche said the Senate will take time to ensure “that we are on solid legal ground.”

He said he believes the House passed an $1,100 dividend. It's not clear what size check the Senate might yet support. But Micciche said the bill will likely end up in a conference committee, with House and Senate negotiators hashing out differences.

The statutory budget reserve is referenced in a footnote in a decision by Superior Court Judge Josie Garton that barred the state from sweeping the nearly $1.2 billion Power Cost Equalization Endowment Fund into the constitutional budget reserve. That lawsuit was brought by a coalition that included the Alaska Federation of Natives and electric cooperatives. The Dunleavy administration did not appeal the decision.

Wallace noted the Alaska Supreme Court has not weighed in and told senators “caution is warranted,” because while the decision “pretty clearly seems to suggest” the statutory budget reserve is not subject to being swept, the administration has not changed its position.

House Speaker Louise Stutes, a Kodiak Republican, told reporters lawmakers are “not looking for a lawsuit” and believe based on the court case the reserve is a “legitimate funding source” that can be used for the dividends.

Rep. Adam Wool, a Fairbanks Democrat, said an $1,100 dividend represented what the state can afford. He said it wouldn't require taking more from the earnings of the state's oil-wealth fund, the Alaska Permanent Fund. Lawmakers have sought to limit what can be drawn from earnings each year for government and checks, and this year's draw amount was spoken for in the budget that passed earlier this year.

Proposed amendments for larger dividends failed. Dunleavy had proposed a roughly $2,350 dividend.

Some members of the House's Republican minority expressed frustration with how the dividend would be funded in the bill that passed Tuesday.