Representatives from both houses of the Alaska State Legislature are in the first of what will be two special sessions trying to complete and pass a budget. If they can not deliver a budget that Governor Dunleavey is willing to sign by the end of this month, 14,000 State employees will be laid off.
District P Senator Gary Stevens of Kodiak spoke with KBBI's Kathleen Gustafson for this Legislative Update. Stevens says he's confident that can be avoided and there are only two issues to be resolved - the size of the dividend and how to pay for it.
Transcript
Senator Stevens
Senate Finance Committee suggested the $1,000 PFD. So we've got this conference committee who any dealing with - is it going to be zero is going to be $2,400. It's going to be somewhere in between.
I hope we can settle the PFD before we leave, by the 18th of this month. But if not, something that we could easily do and has been done in the past is to put off the amount of the PFD until August when we meet in a special session and pass the rest of the budget.
KBBI
On the last day of the regular session, the Senate approved a $6.2 billion spending plan. That includes 1.5 billion for the permanent fund dividend budget. Negotiators might try to make the permanent fund dependent upon approval of the reverse sweep. Are you in favor of tying the PFD and the reverse sweep together?
Senator Stevens
You know, it doesn't make any sense to do that. The reverse sweep, you have to understand is just, we empty out all the accounts and then fill them back up. Maybe the minority in the House believes that they can threaten not to give us the reverse sweep and thereby get more benefits that they want, maybe a higher PFD.
They would look foolish if they forced us into closing down government, simply because they refuse to vote for the reverse sweep.
We should talk about how much should the PFD be. Understand that if the PFD is about a thousand dollars, then we can pay for that. We've got the money to do that. If the Permanent Fund Dividend is higher than a thousand dollars, we're going to have to dip into the Permanent Fund to take more out than we should. It's about $81 billion now. I consider it the crown jewel of Alaska and we should not overdraw it.
Kathleen, we are now making more revenue from the interest on the permanent fund than we make from oil. It's really crucial. There are people who really want us to go in there and destroy the permanent fund. And we could do that, you know. The governor has suggested we take $3 billion out of it.
KBBI
Yes. He has a proposal for a whole new funding formula and a constitutional amendment, that would require a vote of the citizens.
Senator Stevens
I don't think that's going to happen either, but it's what we've got. The governor's proposing taking $3 billion. That's a lot of money to take out of the Permanent Fund. All the experts tell us, you can take out 5% of a big fund like that. But once you take out more than that, you're going to start destroying that permanent fund in the very short time. You know, people are saying, "Oh, let's take out 3 billion this year, but we won't do it again."
Well, I can tell you, the legislature may not work that way. While I have been in the legislature, we had a $16 billion in savings in the C onstitutional Budget Reserve. Over the years, we took that money out to pay for our budgets. We destroyed our savings accounts in order to balance the budget. If that's the decision the legislature wants, we can start taking more and more money out of the Permanent Fund. It will not be the permanent fund it is today.
For every billion dollars we take out, $500 million is lost in interest every year. I think it'd be a terrible mistake to do that. You know, one of the issue is folks say, "Well, why don't we have an income tax and a sales tax?"
You know, I'm not politically in favor of that, and I think we can avoid it. I think if we are reasonable, in our use of the permanent fund. we can avoid an income tax or a sales tax.
KBBI
The governor is also proposing a law that requires a vote of the people to institute any new taxes.
And I hear you saying you're not in favor of new taxes, but are you in favor of allowing that to be decided by a vote of the citizens?
Senator Stevens
Kathleen, we can waste our time and do that, but I can tell you in Alaska, people will not vote to tax themselves.
KBBI
All of that comes up in the second session, that stuff doesn't really get addressed this time around.
Senator Stevens
Right. That's true. And it may or may not be addressed in the second session. And then the governor places a call and he puts all of the issues that he wants to be discussed. And it's the legislature that decides whether they will be dealt with, or not all.
KBBI
The legislation that was in play and process, when the session ended after 90 days - I went through all the bills that you sponsored. It looks like that nothing is really all the way through. They're still waiting on signatures from the governor. You have bills sitting in Education in State Affairs in Finance....
Senator Stevens
No, no, absolutely. It's a two year session. So every bill that was introduced this year will be rolled right over in the next year. So my bills that I've introduced are all in a good position. There'll be some changes to them, but I think they will have a good hearing and hopefully will pass.
The one bill that did pass is a special education bill, crucial to our school districts, to provide special education for each and every district. So that did pass.
I got a call from the governor's office that they would like to set up an event so we, so the governor can sign it. The nice thing about that bill is it also puts in a small cost of living increase every year for the next five years.
KBBI
So you sponsored a bill this session to repeal the 90 day limit. It took the Senate a fair amount of time and the House, even longer to arrange themselves and agree to leadership and agree to start hearing bills. The bill that you've sponsored is in State Affairs Committee right now.
Senator Stevens
First, realize it hasn't worked. The 90 day session hasn't worked.
It's a good idea. And sometimes we have been able to do that. Twice, we have done it since that has passed. And I hope in the future we'll be able to keep it to 90 days.
But the reality is that it just takes longer than that. I know people are unhappy that the legislature is slow. But you know, if you have a dictatorship, things have happen very fast. But with the legislative process, we have to find a way for a majority of legislators , 40 in the house and 20 in the Senate, we have to find a way for the majority to have a vote and to agree on something. And it just takes time.
The big issue this year, of course, was the budget, but also all the bills. So there've been very few bills actually pass this legislative session. Those will continue to be considered in the future, but 120 days is in the constitution. Actually it's 121 days. We'd like to do it in 90 days if we could, but frankly, it just often doesn't work. Particularly as you indicated, the House took a month to get organized because they are so badly divided.
And, as you know, they have just a very minimum of a majority of 21 or 22 people. So that's very hard, for any legislative body to deal with such a small majority. The Senate is a little more comfortable with 15 members in the majority caucus.
I hope I answered your question on that at 120 day session. I think it makes sense. 90 days simply has not worked, and constitutionally, we have the right to go to him 121 days.
KBBI
And then the last thing I wanted to ask you about on the record is the governor's plan for allowing gambling. I mean, we already have rippie parlors and pull tabs and that sort of thing, but he's talking about something a little deeper. Are you in favor of that?
Senator Stevens
You asked a direct question I'll give you a direct answer. No, I'm not.
I just think that gambling has so many negative impacts on a community. I mean, if people start to gambling their rent money in the hopes that they'll have more. I mean, I just see so many bad things coming out of that. You look at other states that have gambling, but you know, it's....
I'm not going to be able to stop it if, if that's what the public wants. I that's what the legislature wants, then it could pass. But I just see so many negative things attached to gambling and I hope we can avoid it.
You know, I think that's all the big things, There are a lot of bills out there that I've sponsored that I hope we'll get through this session:
The early college bill,
the tax credits for our processors for Cod and Pollockto help them get into new lines of processing.
So those are important bills and I, and I hope they get through this next year.
Good talking to you.
KBBI
Thanks so much, bye.
End transcript
