Members of state house moving forward, regardless of lack of organization

They’re still not organized with the usual legislative committees and a presiding officer but members of the state House are moving ahead with plans for informal briefings on state revenues and oil production this week, for all 40 state representatives in a “committee of the whole.”

The procedure is unusual but not unprecedented. In the early 1970s all 60 legislators, House and Senate members, gathered to hear presentations on state oil tax policy.

Rep. Tammie Wilson, R-North Pole, said she is organizing a meeting on state income with Revenue Commissioner Bruce Tangeman set for Wednesday afternoon which will be followed by presentations on oil production outlook by Natural Resources Commissioner Corri Feige on Thursday.

Wilson spoke Monday morning press briefing in the state capitol held by House Republicans.

“This is a unique opportunity for all members of the House to hear this information at the same time, and to ask questions,” Wilson said. She has been in contact with Rep. Neal Foster, D-Nome, who is the temporary presiding officer, on arrangements for the meetings.

Meanwhile, negotiations continued through the weekend on an organization and Rep. Dave Talerico, R-Healy, said he is encouraged that Republicans and Democrats are beginning to find common ground on the key issues of the budget, crime and the Permanent Fund dividend.

“We’re starting to determine what we all have in common,” Talerico said.

The slow approach in the negotiations is best in the long run. “I’m not one to bludgeon people,” toward agreement, he said.

Wilson said the time lost in the organization delay really won’t impede the Legislature’s work on its core responsibility, which is the state budget. Legislators can’t start work on the budget until Gov. Mike Dunleavy comes in with this budget plan on Feb. 13. “All we have before us is the budget submitted by the previous administration, and we know that Governor Dunleavy will be submitting something that is radically different,” Wilson said.

However, having to wait until Feb. 13 will put the Legislature behind schedule, she said.

“In a normal year we’d be halfway through the budget in House Finance subcommittees, with the goal of getting the budget to the House floor by mid-March.”

Talerico said he’d still like to see the Legislature finish its work by the 90th day, in mid-April, but the late start in budget work could put that in doubt.

Meanwhile, the governor has laid out details of how his plan to make retroactive payments for “underfunded” Permanent Fund dividends in 2016, 2017 and 2018 would work. In a briefing Jan. 16 Dunleavy said the back payments would be staggered over three years with the incremental payment added to the regular dividend for that year.

Under this plan the back payment from 2016 would be combined with the regular PFD of 2019, which would be “fully-funded”; the back payment of 2017 would be combined with the regular dividend of 2020, and the back payment of 2018 combined with the regular PFD of 2021.

The “fully funded” dividend is one relying on a statute with a formula that guides how the PFD is calculated. Essentially, half of the Fund’s annual realized, or cash, earnings are to go to the PFDs.

However, it is only a guide since the Legislature approves the actual appropriation amount. Still, over many years the Department of Revenue has relied on the formula to calculate the dividend and the amounts have been approved by legislators because there was no shortage of money.

That changed in 2015 when oil prices and state revenues dropped sharply, creating huge multi-billion-dollar deficits. In 2016, 2017 and 2018 the PFDs were funded at below the statutory level because the state faced a financial crisis. Dunleavy, however, feels the PFD statute is a kind of compact with people, and he proposes to follow the formula with retroactive checks for three years of underpayments at the full statutory amount.

A concern legislators have, however, is that the regular 2019 PFD funded at the higher amount would reduce money for the state General Fund budget by about $900 million, or over half of the projected $1.6 billion deficit. Going forward, fully-funded dividends would increase over time as the Permanent Fund grows, putting continued pressure on the budget.

Meanwhile, if the Legislature agrees the higher dividends would put a lot of money into the economy. Assuming the 2019 dividend is funded at $3,000, which may be low, a check of $4,061 would be issued with the combined regular PFD and the 2016 back payment, according to an analysis by Alaska Legislative Digest, a weekly report on the Legislature.

Assuming the 2020 dividend at about the same amount, a check of $4,289 would be issued, combining the 2017 underpayment with the 2020 regular PFD, according to the analysis. Assuming a similar regular PFD in 2021, a check of $4,328 would be issued, including the underpayment in 2018.

Assuming about 600,000 Alaskans apply for and qualify for the PFDs, the amount of dividends paid each year would total at least $2.4 billion yearly for three years, according to Legislative Digest. Part of this would be paid to the federal government in tax, however. In recent years, with lower PFDs, about $1.1 to $1.2 billion in dividend money was paid out.

Dunleavy has introduced two bills in the Legislature to authorize the back payments. One is Senate Bill 23, making special appropriations from the earnings reserve account for the payment of unpaid permanent fund dividends, and authorizing dividend payments through 2023. The second is Senate Bill 24, directing the Department of Revenue to pay dividends to certain eligible individuals over the next three years.