A state budget will likely be passed at the end of this month’s special legislative session, but the PFD question may not be answered by then. That’s according to Kodiak Senator Gary Stevens, who sat down with Jared Griffin at KMXT to talk about recent developments in the legislature and what that means for Kodiak.
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In May, Governor Dunleavy called two special sessions for the Alaska legislature to complete work on some pretty major items. The main goals of the June special session are to pass a state budget and address the PFD.
A budget must be passed before June 30, and this is not the first time that the state has come down to the wire on that, but Senator Gary Stevens from Kodiak is not concerned.
“The government will not be shut down. I can promise you that. Pink slips will not be sent out. I can promise you that.”
But what can happen is that a budget will be passed with everything in it except for the PFD. In that case, Stevens said the PFD will be taken up at the next special session in August.
The PFD Question
The PFD has grown exponentially this past year, from $60 billion to over $80 billion. Senator Stevens expressed optimism about the potential of the PFD to fund nearly all state government services in the near future.
“When it reaches 100 billion, 5% is 5 billion. And 5 billion pays for everything. It pays for all public services, schools, police protection, mental health, all of those things. Pretty remarkable. It pays for that plus it pays a reasonable dividend, maybe around $1000.”
Stevens believes that by reducing overdraws from the fund now would help the state avoid taxing Alaskans to pay for government services.
“We can overdraw the permanent fund by another 5% as the governor has suggested. We could do that. But that means the investment is going down every year, the money you get every year.”
For those reasons, Senator Stevens opposes Governor Dunleavy’s proposal to enshrine the PFD formula in the state constitution.
“If we put those things in the constitution, and we can’t touch them, what happens if things go to hell in a handbasket?…How does the state then pay for services? The only way we can that then is to do an income tax or sales tax.”
Federal Relief
The state of Alaska is also receiving a portion of the $1 trillion in federal Covid relief to use over the next three years. Some of that money will be trickling down to Kodiak.
“The plan that came out of the house and the senate certainly agrees to is to forward-fund the Marine Highway system by six months. So that instead of doing a one-year budget, it’s a one and a half year budget, which really allows the marine highway system to make plans.”
Some of those funds will also be used on the construction of a new Tustumena ferry vessel, which is certainly good news for Kodiak residents.
Education
Stevens also said that Kodiak can count on at least 50% reimbursement from the state for school bond debt, which has been a significant concern to the Kodiak Borough Assembly as they worked through their budget process this month.
Kodiak and the state often have difficulty recruiting and retaining teachers. And one of the largest gaps is in special education. Stevens authored a bill that increases funding for special education teacher training and support through the Special Education Service Agency. He hopes that the governor can come to Kodiak to sign it.
“I talked to Larry LeDoux, and he’s willing to make arrangements. We’ll see if that works out. The governor may not fit his schedule and may have to be done in Anchorage.”
Fisheries
Stevens is also working on a bill to encourage new technology in Alaska fisheries, specifically for Kodiak pollock and cod.
“We did this years ago. I was involved with the committee that formulated a tax credit for processors in salmon. And we were able to help processors go into new products, go more into flash frozen filets, and really help them buy new equipment they needed so they could do that. ….This bill is very similar in that it would do the same thing: tax credits for new equipment in terms of pollock and cod.”
Stevens believes this bill will increase the value of pollock and cod. He hopes the bill will pass next year.
The legislative special session will wrap up by June 18. The second special session beginning in August is tasked with exploring state revenues, appropriating federal pandemic relief funds, and debating constitutional amendments on spending and taxes.
