Alaska House votes down full $3,000 PFD as parts of the capital budget pass

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ANCHORAGE (KTUU) - Parts of the capital budget have passed through the Alaska House of Representatives while an amendment, aimed at delivering a full Permanent Fund dividend, failed to pass.

The PFD amendment, introduced by Rep. Dave Talerico, R-Healy, and sponsored by nine other members of the House, would have drawn $1.944 billion from the Earnings Reserve Account to pay a roughly $3,000 PFD in 2019.

That amendment failed on a 15-21 vote, mostly along caucus lines. The House majority caucus, formed with the goal of delivering a sustainable PFD, largely voted against it. The House minority caucus, believing that the statute that calculates the size of the PFD should be followed, voted for it.

Rep. Tammie Wilson, R-North Pole, joined the House minority in voting for the amendment alongside Rep. Gabrielle LeDoux, R-Anchorage, who doesn’t sit with either caucus.

Votes have been held in the Senate over the size of the PFD, but this was the first PFD vote in 2019 in the House.

As for the capital budget itself, sections of the bill passed Wednesday afternoon on a 31-5 vote with four members absent. Six members of the House minority joined the House majority and LeDoux in voting for the bill.

However, provisions that required spending from the Constitutional Budget Reserve failed to pass through the House on a 13-23 vote.

The $1.6 billion capital budget funds construction and maintenance projects across the state. Much of the budget for 2019 is funded from the CBR.

Three-quarters of members from both the House and Senate are required to approve spending funds from the CBR, meaning six members of the House minority and LeDoux would need to join the House majority in supporting the capital budget.

Wilson, the co-chair of the House Finance Committee, said the decision to use around $150 million from the CBR to fund the capital budget came from a desire to leave more funds in the Undesignated General Fund to pay for the PFD.

An ultimatum was put forward by the House minority that members would only support using the CBR to fund the capital budget if it included a $3,000 dividend.

“We gave the House Majority every opportunity to use the right funding source on the capital budget today and they did not want to do it," read a statement from House Minority Leader Lance Pruitt, R-Anchorage.

"We offered amendments today that would have addressed every single obstacle that stands in the way of us finishing out this special session, and those were all turned down as well,” he wrote in an email.

House Speaker Bryce Edgmon, I-Dillingham, took to social media and said the decision had the effect of "hamstringing" private sector investment.

"The House minority is holding several hundred million in capital dollars hostage by refusing to fund a capital budget unless the State of Alaska pays the largest Permanent Fund Dividend in the history of our state," he wrote.

The PFD amendment saw spirited but civil debate by almost everyone in the House. All but two of the 36 members stood to speak, with only House Speaker Bryce Edgmon, I-Dillingham, and Rep. Neal Foster, D-Nome, staying silent.

The arguments were familiar in the long-running debate over the size of the 2019 dividend. Talerico said the Legislature should abide by the PFD statute on the books “and move forward.”

Rep. Andy Josephson, D-Anchorage, said the proposed $1.9 billion draw from the ERA is unsustainable and breaks the rules-based system devised through Senate Bill 26. “This is bad policy. It results in compliance with one law and defiance of another law,” he said.

Some members spoke about their personal experiences receiving the PFD and the difference it makes.

Rep. Sarah Vance, R-Homer, described moving with her family to Alaska and her parents buying a heater with the dividend. Choking up, Vance said the PFD “has brought heat to our home.”

Others, like Rep. Ivy Spohnholz, D-Anchorage, said the dividend was no less important to her family but sustainability should be a goal to keep it strong in the future. “There was a time in my life when my family was struggling financially, when I didn’t get school clothes until the dividend came,” she said.

Gov. Mike Dunleavy took to social media shortly after the amendment failed to write that the vote exposed which lawmakers supported a full PFD and which didn't. "I said it before and I’ll say it again, the Legislature’s job is not over until it passes a full statutory PFD for Alaskans," he wrote.

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