On Friday, April 11, the House passed a floor amendment to the budget that lowered the Permanent Fund Dividend (PFD) from the statutory amount to an amount equal to 25% of the yearly draw from the Permanent Fund, referred to as 25/75.

This lowered the PFD in the House budget to approximately $1,400 from $3,900. It also lowered the deficit from $1.8 billion to $238 million. This was the only amendment offered that day by the House majority. 

Republicans in the House minority were caught off guard and reacted to the amendment with anger and dismay. They were missing three of their members, and said they were promised by the House majority that no amendments would be offered on Friday. For all but two of the nineteen members in the minority, this was, in fact, the first they had heard of the amendment. 

The amendment passed 20-17 at 4:34 pm after an hour of debate. The Landmine has since learned of a meeting that took place at 9:30 am on April 11 between Speaker Bryce Edgmon (I – Dillingham), Representative Louise Stutes (R – Kodiak), the rules chair, Representative Mia Costello (R – Anchorage), the minority leader, and Representative DeLena Johnson (R – Palmer), the senior minority member on the finance committee. 

In the meeting, Edgmon and Stutes told Costello and Johnson that they did not want to offer the amendment, calling it a “nuclear option,” but unless some kind of compromise could be reached, they would have no choice.

After this article was published, a spokesperson for the Republican minority provided the following statement, “Costello and Johnson dispute that they were given an ultimatum, and instead were told that the majority weren’t doing the amendment at that time but would inform Costello if things changed.”

Edgmon and Stutes said their hands were tied as the majority of their caucus were not ok with sending the Senate a budget with a $1.8 billion deficit. Costello and Johnson did not inform the other 17 minority members about the meeting. 

The Landmine was not made aware of this meeting until five days later. During an early evening House minority press conference on April 16 – after the House passed the budget – Costello was asked by the Landmine what exactly was said, when, and to whom regarding the dividend amendment. She said she, and others, were told on Thursday and Friday by the majority that no amendments would be offered on Friday.

Costello ended by saying, “We were not expecting amendments until Monday. And then on Friday on the floor, after most of the floor session had passed, I was brough up to the dais and I was told that they were going to run one amendment. It was the dividend amendment. And that’s when I found out.” 

Earlier that day during budget debate on the floor, Costello said in her speech, “The majority misled our caucus and deprived three of our members – present – sidelining the voices of tens of thousands of Alaskans…”

She was then interrupted by Speaker Edgmon, who said, “Representative Costello, I want to remind you that you and I had a conversation many hours before that vote took place. So the direct assertion that we deprived the minority of that vote, I beg to differ with that. As presiding officer I’m not allowed to get into the debate, but when I hear something that I think is a factual error, I’m going to set forth, so please continue.” 

After the comment from Costello at the press conference, Stutes informed the Landmine about the Friday morning meeting. Edgmon corroborated the meeting, and said it was meant to try and find some kind of compromise to deal with the dividend and deficit.  

In an interview on April 22, Costello told the Landmine that she did not pass on the information to her caucus because she felt it was not made clear to her in the meeting that the amendment would be offered. She also said that the floor session was supposed to start at 10:30 am, which was less than an hour after the meeting. But the floor session did not start until 2:40 pm because the House was waiting for the Senate to send back the education bill. 

The missing Republicans were Representatives Will Stapp (R – Fairbanks), Elexie Moore (R – Wasilla), and Mike Prax (R – North Pole). Prax was attending a funeral. Stapp was home receiving an award. And Moore was home meeting with constituents.

If Costello would have alerted her members that morning, it’s possible they could have flown back to Juneau. At the minimum they would have known. The minority also could have raised the issue publicly, which would have put more pressure on the majority. 

The day after the amendment passed, Moore made this Facebook post. Moore told the Landmine that had she been informed Friday morning that it was possible the amendment was going to be offered, she would have flown back to Juneau. It would not have changed the outcome of the vote, but would have at least allowed her to come back and vote. 

Amendments, unlike bills, can pass with a majority of members present instead of a majority of the body. With three missing Republican representatives, an amendment could pass with 19 votes instead of 21 if all 40 members were present. The House majority only has 21 members, and two of them – Representatives Neal Foster (D – Nome) and Nellie Jimmie (D – Tooksok Bay) – had consistently voted for a larger PFD on the finance committee. Meaning the majority was unable to pass the amendment without either the help of the minority or missing minority members. 

It’s possible that had the minority been informed of the meeting, they could have got somethin in exchange for compromising on the dividend. The majority was willing to compromise in order to avoid the nuclear option of running the dividend amendment with missing minority members. 

To be fair, there were several other factors at play. The biggest being the disastrous House Finance Committee meeting that occurred the evening before the April 11 floor session. The House Finance Committee had passed out the operating budget a week before, but had failed to transmit it to the rules committee because of the embarrassingly large deficit due to the full PFD. The committee was scheduled to have a meeting at 1:30 pm on April 10, but that meeting was delayed until 6:30 pm, a full five hours.

Freshman Representative Jeremy Bynum (R – Ketchikan) was in talks with the finance co-chairs that day. It’s not clear if an agreement or deal was made. Bynum told the Landmine he did not make a deal. But what is clear is when the meeting finally started, the committee rescinded action on the budget they had passed out a week prior. They would not have done that unless they believed they had another path. 

They then introduced a new and bizarre committee substitute for the budget. Among other things, it reduced the PFD to the 25/75 amount, drew $81 million from the Public School Trust Fund, and changed the surplus PFD split between an energy rebate, additional K-12 funding, and a deposit to savings.

The majority would not introduce a new version of the budget like that for no reason. They must have at least thought they had a deal with Bynum. Representative Johnson commented that the new budget was still warm, literally hot off the press.

After a lot of heated comments during debate, including one of the Legislature’s lawyers saying the overdraw of the Public School Trust Fund likely violated the law, the meeting blew up. Bynum said that he appreciated the efforts towards a compromise to a balanced budget, and that while part of him wanted to vote yes, he unfortunately had to vote no. Other minority members freaked out when Representative Andy Josephson (D – Anchorage), the operating co-chair, tried to force a vote on the new bill.

Representative Calvin Schrage (I – Anchorage), realizing the votes were not there, withdrew his motion for the new version and abruptly made a motion to move the old version – that included the full PFD – that they had moved out a week prior. It was a truly wild outcome of the meeting. 

Why Josephson did not just adjourn the meeting after it all blew up is anyone’s guess. He probably determined that no compromise was going to be reached with the minority and passing out the version they had passed out a week ago was the best they were going to get.

While the finance committee meeting was happening, the majority noticed the budget on the floor the next day. This meant that it was at least possible that amendments could be heard on Friday. Based on conversations with a more than a dozen representatives and staff, it’s clear that the majority told the minority on Thursday that amendments would not be offered on Friday. But after the blow up in the finance committee on Thursday night, the majority was put in a corner. 

Here is what is known:

• The majority told Edgmon and Stutes in no uncertain terms that they would not send the Senate a budget with a $1.8 billion deficit.
• It’s clear that with three missing Republican minority members, the majority saw an opportunity to potentially unleash a nuclear option to reduce the PFD.
• Edgmon and Stutes informed Costello and Johnson of the situation on Friday morning, hoping to reach a compromise.
• Costello and Johnson did not relay that information to their fellow minority members. This resulted in several minority members making heated and emotional comments because they, rightfully, felt they were lied to. 

The irony is as mad as the Republicans were, most of them were relieved that the dividend issue was put to bed and that they could blame it on the Democrats. It’s easy to argue for a full dividend, but it’s hard to argue for billions of new revenues or budget cuts. 

In the end, the House passed the operating budget and sent it to the Senate. But there is still a month left in session. It will be interesting to see how the minority behaves moving forward.