If you read the news you are probably aware that on Monday the State Senate voted to give Alaskans an extra $1,000 stimulus dividend. This would be in addition to the $1,000 dividend the legislature has already included in the operating budget, which is payable this October. Unless you follow the intricacies of the legislature you are probably unaware of how exactly the stimulus dividend got included by the Senate. The answer is a bit unbelievable – it happened with the unwitting assistance of Senator Natasha von Imhof (R – Anchorage).
Von Imhof’s position on the Permanent Fund Dividend (PFD) has been firm and consistent since she was elected in 2016. She has consistently argued that the PFD should not be prioritized over other critical state spending, particularly if paying larger dividends would require overdrawing the Permanent Fund Earnings Reserve as determined by the Percent of Market Value provision, which provides a predecible yearly draw to fund state services. She has said multiple times, “We don’t have a fiscal crisis, we have a priority crisis.” Her position has been so ubiquitous that many Alaskans who pay little attention to Alaska politics associate her name with reduced dividends. You could argue that she has been the poster child for paying a dividend we can afford.
As co-chair of the Senate Finance Committee, she is part of the five-person Senate leadership team. Keep that in mind when you are reading this.
During Senate floor debate on the operating budget, Senator David Wilson (R – Wasilla) introduced an amendment to pay a $1,300 bonus stimulus PFD dividend immediately. That amount represented the remainder of the “full” statutory dividend Alaskans didn’t receive last year. After lengthy debate, that amendment failed 9-10. This was not necessarily surprising since the Senate remains deeply divided on the PFD issue. Had Senator Mia Costello (R – Anchorage) been present (she recently fell ice skating and broke her hip) she likely would have voted yes. Wilson’s stimulus dividend still would have failed on a 10-10 vote.
Later in debate, Senator Mike Shower (R – Wasilla) offered an identical amendment to Wilson’s, except instead of a $1,300 extra dividend, he suggested a $1,000 one. This time, after much less debate, the amendment surprisingly passed 12-7! So what exactly changed?
Well, Senator Von Imhof, the co-chair of the Senate Finance Committee and outspoken critic of overdrawing the Earnings Reserve to pay a dividend we can’t afford, ended up voting yes. That’s what changed. Watch the floor vote carefully as it unfolds. Von Imhof voted yes almost immediately, followed by a yes vote from Senator Peter Micciche (R – Soldotna), who had also voted no on the earlier $1,300 amendment. It’s not unusual on close, controversial votes like these for legislators to watch the tally board to see how the votes are falling. He likely saw Von Imhof’s yes and figured why not. With her vote, the amendment had the votes it needed to pass already, so why wouldn’t he want to be on the winning side of an extra $1,000 check. Then, before the final votes are cast, you can clearly see Senator Josh Revak (R – Anchorage) change his vote from no to yes. He too had voted no on the earlier $1,300 PFD amendment. He even spoke about his no vote.
If you don’t normally follow the ins and outs of the Alaska Legislature, let me provide some context of the significance of her vote. It would be like me agreeing to give up alcohol and women. Two of my core values.
It seemed clear that the other members of the Senate leadership team and the Majority were perplexed and unhappy about her vote. This amendment caused major upheaval in the “majority of the majority,” who have consistently opposed a supplemental dividend. Von Imhof is now on record for helping facilitate a nearly $700 million overdraw from the Earnings Reserve, something she’s been against since she came into office.
The vote also gave Shower a huge win. Shower has been a consistent thorn in the Majority’s side. He was stripped of his committee chairmanship for bailing on a critical vote last year and has been clinging on to his position in the caucus. I saw him in the hallway after the vote and remarked, “You got one!” I thought he was about to go full Ric Flair!
Von Imhof quickly realized the consequence of her vote. Later in debate, she made a motion for the Senate to rescind their action on the $1,000 stimulus amendment. This is a technical way of getting a do-over on the prior vote. However, a majority of members have to agree to support the motion to rescind in order for the vote to be taken over. The vote to rescind failed 8-10. This is significant because several members of Von Imhof’s Senate Majority voted no, a serious rebuke to the co-chair of the Finance Committee.
The budget is now in a Conference Committee between the House and Senate. Representatives Jennifer Johnston (R – Anchorage) and Neal Foster (D – Nome) are the House Majority members on the Committee. Both oppose overdrawing the Earnings Reserve. Senators Bert Stedman (R – Sitka) and von Imhof are the Senate Majority members on the Committee. Stedman is adamantly opposed to overdrawing the Earnings Reserve. Several sources in the House Majority have expressed frustration and anger for the Senate adding the $1,000 stimulus PFD. The Conference Committee is likely to reduce the extra dividend or pull it out completely.
Von Imhof has not explained why she voted the way she did. No one I spoke to in the Senate Majority was aware she was going to vote for the amendment. Some have suggested she did it in order to have an item to negotiate in the Conference Committee with the House. But she could have stated her intent on the Senate floor before the vote, which she did not. It could have been a political decision that allows her to tell her constituents that she supported a $1,000 COVID stimulus PFD. She could have just made a mistake and voted the wrong way. If that’s the case, it’s an epic one. Whatever the case, it’s a major change in her prior position and a serious leadership lapse.
The regular $1,000 October dividend, which is included in the operating budget, is scheduled to be paid out of the Constitutional Budget Reserve, not the Permanent Fund Earnings Reserve. It took a lot of negotiating to reach an agreement on that. Adding an additional $1,000 stimulus PFD throws a big wrench into the delicate final “get out of town” negotiations. If the Conference Committee removes it, Alaskans will be confused and further enraged. And they have reason to be. The constantly changing headlines about the size and frequency of the PFD is not fair to the public. If the people currently locked in the Capitol don’t understand what’s happening, then the public surely doesn’t.