By Tim Bradner
The state Senate approved a state operating budget for next year Monday with provisions for two $1,000 Permanent Fund Dividends, one to be paid as soon as possible to Alaskans who qualified for the PFD in 2019 and a second in a regular PFD check sent out later in the year.
The extra PFD was added to the budget through a floor amendment to the budget offered Monday by Sen. Mike Shower, R-MatSu. The regular PFD was added to the budget Saturday by the Senate Finance Committee.
The budget now goes to the state House to concur in the Senate changes including the two PFDs. The House can be expected to reject the changes, which is customary, with final negotiations to occur in a House-Senate budget conference.
If the PFDs are approved the funding needed, which will be about $1.2 billion, will add to an anticipated state deficit of $500 million expected for the FY 2021 state budget, pushing the deficit to as high as $1.8 billion.
Another aspect of Shower’s early-PFD plan, however, is that it would pay to people who enrolled and were qualified for the dividend last year. The 2020 dividend, in contrast, will be paid to people who qualify this year.
The distinction in this that some people who qualified in 2019 have moved out of state and are no longer residents, but would be receiving the early PFD anyway.s
Meanwhile, House and Senate leaders are hoping to get work on the budget and major bills done quickly possibly by Friday or early next week to allow the Legislature to take a recess before cases of the COVID-19 virus show up in the capitol building where offices are small and many staff work in cramped conditions.
The Legislature’s action is playing out against a severe economic downturn that has hit the state. The speed with which the COVID-19 virus has spread is causing shutdowns of businesses and institutions across the nation, but in Alaska the effects are severe because virtually all of the state’s private sector economic pillars are challenged.
The collapse of oil demand and crude oil prices is now threatening a promising renaissance of North Slope activity. ConocoPhillips has already cut development drilling and is laying down two drill rigs. Oil Search has delayed a preliminary production start of the Pikka project, where Repsol is 49 percent owner.
Southeast Alaska may lose its entire 2020 summer tourism season because of cruise ship cancellations, and commercial fisheries may be peril because of virus-related uncertainties on whether workers can be mobilized to coastal processing plants and over transportation issues and economic issues in China, a major customer.
If the Legislature takes a recess all bills remain active so that when lawmakers reconvene they can pick up work on legislation. However, the Legislature must adjourn by the 121st day of the session, which will be in mid-May. When that happens all bills die, and must be re-introduced.
With an impending recess, however, the Legislature is moving quickly on priority bills, particularly those that could grant economic relief in during the current downturn caused by the COVID-19 virus.
A bill enhancing Unemployment Insurance Compensation payments to laid-off workers, House Bill 308, has moved quickly and was approved Sunday by the Senate after passing the House earlier. The bill changes waiting periods so as to get money out quickly and increases allowances for dependents.
So far, however, there is no action to increase the weekly maximum benefit of $370, which is one of the lowest benefit amounts in the nation. A change in statute would be needed for that. Alaska is also one of three states where employees pay UIC taxes on wages along with employers.
Meanwhile, the state unemployment compensation fund has a healthy surplus and will be sustainable through the present crisis, state labor officials told the Senate Finance Committee last Saturday.
A bill that is advancing fast but ias not yet approved is SB 115, which would increase the state motor and marine fuel taxes. The bill was before the House Finance Committee last weekend. Sen. Click Bishop, R-Fairbanks, is sponsor. A provision added in the House Transportation Committee allows commercial fishing vessel operators to apply for a refund for part of the tax.
Even at the higher rate 16 cents per gallon Alaska’s tax would be among the lowest in the nation. The new motor fuel tax revenue would help support highway maintenance; the marine fuel revenue would support harbor and other maintenance.
Another bill moving is SB 155, which would streamline and improve reporting requirements for work on state mining claims. Also sponsored by Senator Bishop, the bill has passed the Senate and was up in House Finance Committee on Sunday, March 22.
Karen Matthias, Executive Director of the Alaska Producer’s Council, explained the bill this way: “Under the current system, Alaska miners—ranging from small placer miners to large commercial operators—have encountered significant problems, including loss of land tenure, from minor mistakes and clerical errors relating to affidavits of labor and qualifications requirements.
“Some miners have spent thousands of dollars to resolve issues with competing claimants that arise due to vague laws and regulations that do not clearly define what is required to maintain mining claims,” Matthias said.
Another bill that has passed both the Senate and House, and is now before Gov. Mike Dunleavy, is SB 123, which establishes a framework for independent electric cooperatives along the Interior-to-Southcentral “railbelt” power grid to work together. The utilities, and legislators, have been working for years on such an agreement.
SB 123 is now headed to the governor’s desk after passing the House March 19. It had passed the Senate earlier. Language from a telecommunications bill, SB 81, was added to SB 124 in the House, a change that was accepted by the Senate. SB 81, wich had been approved by the Senate earlier, is mainly a technical cleanup of the state Electric and Telephone Cooperatives Act. SB 124 also strengthens the Regulatory Commission of Alaska’s authority over independent utilities.