Today is day 90 of the legislative session! Folk Fest was held this week in Juneau. In addition to some really good music the smell of marijuana and BO was strong in the vicinity of downtown. By some miracle, and not without challenges, the House and Senate were able to meet their agreed upon deadline and exchange budgets on Friday (4/12/2024) afternoon. A new House education bill passed out of the education committee and sent to the finance committee. And a judge ruled that the popular reimbursements to parents under the correspondence program are unconstitutional, setting off another big education fight with just a month left in session.

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House and Senate Exchange Budgets

On Friday evening the Senate Secretary and House Clerk exchanged each others chambers appropriation bills. This is something that hasn’t happened in many years. But last year the Senate held the House’s operating budget and did not send the House their capital budget. The Senate ended up sending back a turducken budget at the end of session – effectively a take it or leave it for the House. This angered many in the House majority. So this year the House made it clear they would not send over the operating budget without a physical exchange of the budget bills.

Many members of the media, legislators, and legislative staff waited for the anticipated exchange. It was supposed to happen at 2:30 pm but did not take place until after 6 pm. It could have been better coordinated. I was picturing something of a face off, with the Senate Secretary and House Clerk standing at opposite ends of the hallway and then meet in the middle.

But instead the Senate Secretary and her crew walked down the long second floor hallway with the capital budget folder. When she got to the House side, the House Clerk was nowhere to be seen. Everyone just kind of awkwardly waited for a few minutes. One person actually suggested she go back for a do over. Finally the House Clerk showed up with her crew and the operating budget bill folder. Representative DeLena Johnson (R – Palmer), the operating budget co-chair, was playing the Rocky theme on her phone! I would have preferred Ecstasy of Gold from the Good, the Bad and the Ugly.

Representative Craig Johnson (R – Anchorage) and Senate President Gary Stevens (R – Kodiak) were very excited. I actually thought they were going to hug it out.

Getting to that point was not exactly a walk in the park. After three long floor sessions with over 130 amendments, the House was able to pass the operating budget on Thursday (4/11/2024) on caucus lines. The Senate passed the capital budget on Friday after spending less than four hours hearing amendments. Their 17-member super majority is an efficient machine.

The difference between how each body dealt with their budgets was noticeable. The House spent two 12-hours days hearing budget amendments. Half of the came from Representative David Eastman (R- Wasilla). Many House members insisted on speaking on every amendment, even the ones that had no chance of passing. Several minority amendments failed by just one or two votes due to majority defections. A lot of amendment votes were a weird mix of majority and minority members.

The Senate, on the other hand, took a much different approach. The members of the tiny three-member majority – Senators Robb Myers (R – North Pole), Mike Shower (R – Wasilla), Shelley Hughes (R – Palmer) – offered a few dozen amendments. But none of the majority members spoke on any one of them. They just consistently voted them down either 3-16 or 4-15. Senator David Wilson (R – Wasilla) voted with the minority on some of their amendments. Shower was really unhappy about being in a tiny minority. At one point he exclaimed, “This is not fair!”

There is still a lot left in the budget process. The Senate is nearly done with their operating budget subcommittee closeouts. Their version of the operating budget is going to look a lot different than the House version – namely the amount of the dividend. And I’m sure the House will have some additions to the Senate capital budget, especially in Wasilla and Palmer. Shower and Hughes represent Wasilla and Palmer in the Senate. As minority members they did not get much in the way of capital money. House Speaker Cathy Tilton (R – Wasilla) and DeLena Johnson, who are in House leadership, represent the same areas.

And once all the changes are done, the differences will need to be worked out in a conference committee. The goal is to to be done by day 121, which is May 15. We will see if we can get there!

House finally takes up PFD constitutional amendment – but fails to pass it

The following is an excerpt from this week’s edition of the Alaska Political Report. You can click here for more information about the Political Report. A subscription is $1,299/year per organization. Discounted pricing is available for non-profits and government entities. Our coverage of the budget starts with the governor’s proposed budget, and we track everything in detail through the entire process. If you have any questions or would like to subscribe, please email jeff@akpoliticalreport.com.

After six weeks in limbo on the House calendar, the chamber finally took up an effort to enshrine the Permanent Fund dividend in the Alaska Constitution — though the measure came up a few votes short of advancing. But the vote and process demonstrated the deep divisions in the House majority and is an indicator for the challenges they will face in the final budget vote.

House Joint Resolution 7 is sponsored by Nikiski Republican Rep. Ben Carpenter, and it would require that the PFD in statute is paid out every year.

The proposal required 27 votes to pass, but it fell five short, with only 22 yes votes.

The timing of HJR 7 was interesting. It came up today after the operating budget passed 23-17 on caucus lines. It appeared a deal had been made to get majority members who want a full PFD to vote for the budget in exchange for hearing HJR 7.

Wasilla Republican House Speaker Cathy Tilton told the Political Report that no such deal had been made, and that it was just time to hear HJR 7. But several majority members told the Political Report they were unaware it was going to be considered. Anchorage independent Rep. Calvin Schrage, the minority leader, told the Political Report that Tilton told him the proposal would come up for debate not long before Thursday’s floor session began.

All that aside, things got very interesting during debate on the resolution. At one point, Wasilla Republican Rep. Jesse Sumner expressed concern about the current PFD statute on the books, and he moved to discharge a separate bill from the House Finance Committee. Senate Bill 107 would change the PFD to 25% of the current yearly endowment-style draw from Permanent Fund earnings — which would translate into a much smaller payment to residents than Carpenter’s proposal under the current statute.

The House Ways & Means Committee changed that fraction to 50%, which would double the size of the dividend from the original Senate bill. The House voted 37-3 to discharge the legislation from the finance committee, sending it to the rules committee.

Sumner’s action sparked requests for other bills to be discharged from committees. Many members expressed concern that the long-discussed “fiscal plan” was missing from the discussion on HJR 7. Anchorage independent Rep. Alyse Galvin moved to discharge House Bill 156, her income tax bill, from the House Ways & Means Committee. That vote split 20-20, meaning that the legislation failed to advance by one vote. Later, Anchorage Democratic Rep. Andrew Gray moved to discharge House Bill 142, a sales tax bill from Carpenter, from the House Ways & Means Committee, which Carpenter chairs. That failed 23-17, but one of the yes votes was Carpenter.

These votes show the sharp division among the House majority. HJR 7 failed, but the vote and debate were a harbinger for what is sure to be an intense fight over the final version of the budget that comes out of the conference committee with the Senate. Today, all 16 members of the minority and Wasilla Republican Rep. David Eastman voted against the budget. The conference committee budget is sure to have a smaller PFD than what is in the House version.

It’s unlikely the 23-member Republican-led majority will be able to garner 21 votes on their own for a smaller dividend. Like last year, they will probably have to rely on minority votes to pass the budget. Whether the minority will offer those votes, and what their price will be, is still unknown; it’s an election year, so a lot can happen. We are watching things closely and will be providing updates and analysis throughout the process.

Other Happenings

A court decision that struck down the state correspondence program reimbursements as unconstitutional is going to have a major impact on the rest of session. Many legislators are already talking about how important the program is. Many parents want to be able to homeschool their kids, and have enjoyed the state reimbursement under the correspondence program. This is going to set off a huge fight between conservatives, who are more inclined to support the program, and progressives, who are more inclined to oppose it. The law to allow this program stems from a 2013 bill sponsored by then-Senator Mike Dunleavy, who was elected governor in 2018. Language from his legislation was added to an education reform measure that was approved by the Legislature in 2014. Judge Adolf Zeman made some interesting points about Dunleavy in his lengthy decision:

House Bill 392, Representative Tom McKay’s (R – Anchorage) new omnibus education bill, passed out of the House Education Committee and was sent to the House Finance Committee. McKay is attempting another shot at a big education bill, but this time trying to get Governor Mike Dunleavy (R – Alaska) and Republicans more. It’s also about giving him some cover in his November election as he voted to sustain Dunleavy’s veto of Senate Bill 140. The bill faces an uncertain future in the House. And even if it does pass, the Senate is sure to strip out many of the Republican priorities. There might still be a deal to be made, and education could be part of an adjournment package, but I’m not holding my breath.

This Week’s Loose Unit 

There were A LOT of candidates this week. Between House Representative Jesse Sumner (R – Wasilla) discharging bills on the House floor, to the chaos surrounding the budget and HJR 7, the House definitely got loose this week. But a member of the Senate really earned this week’s designation. This week’s Loose Unit is Senator Cathy Giessel (R – Anchorage), the Senate majority leader.

In response to a question from me at a Senate majority press conference on Wednesday (4/10/2024), Giessel’s answer really exemplified the term Loose Unit. My question referenced the Dittman Research poll released by Governor Dunleavy. For the first question on the poll, 65% of respondents said Alaska is on the wrong track. I asked the senators why they think that is. Giessel, instead of recognizing the failures in our state on education, housing, energy, infrastructure, and retaining Alaskans, decided to give an extremely condescending and loose answer.

Giessel essentially said the public is too dumb to understand the difference between the federal and state government and the difference between the House and the Senate. For an elected official that is about as loose as it gets. She then made a point to say, “Nothing disparaging toward reporters, but most commonly reported on is what’s happening in the House, not what’s happening in the Senate.” So, according to Giessel the House is the reason the public thinks the state is on the wrong track and the Senate is perfect. Classic Loose Unit behavior.

You can watch her response here:

If you have a nomination for this week’s Loose Unit, or if you have any political news, stories or gossip (or any old pics of politicians or public officials) please email me at jeff@alaskalandmine.com.