JUNEAU — Attention across Alaska has focused on Gov. Mike Dunleavy’s veto of $444 million from the state operating budget, but lawmakers themselves say they are still divided by the issue of the Permanent Fund dividend.
No group is more divided than the Legislature’s 36 Republicans, and in a series of interviews, Republicans on both sides of the issue say that until the dividend is addressed, progress on any other topic — including the vetoes — is unlikely.
“At this point, it’s not a party conversation,” said House Minority Leader Lance Pruitt, R-Anchorage. “It’s really just people who have differences and they have an R next to their name, and they’re kind of dug in.”
Of the 23 Republicans in the 40-member Alaska House of Representatives, seven are members of a coalition majority with the House’s Democrats and independents, 15 are in a minority bloc, and one is a member of neither bloc.
The minority group is in favor of a Permanent Fund dividend paid using the traditional formula in state law. This year, that would be about $3,000. The majority group is in favor of a lower figure, something that could be paid without overspending the Alaska Permanent Fund.
In the Alaska Senate, the 13 Republicans in the 20-member body are split 7-6, with Senate President Cathy Giessel, R-Anchorage, leading the larger bloc, which is in favor of the smaller dividend. Opposing her is a group that includes Senate Majority Leader Mia Costello, R-Anchorage. That bloc supports the traditional dividend.
“The Republicans in the Senate have a difference of opinion about a Permanent Fund dividend size, and that’s the controversy,” Giessel said in a Friday interview.
Sen. Shelley Hughes, R-Palmer, is in the opposite Senate bloc. She agreed that the dividend is what has divided the Senate and said the governor’s budget vetoes haven’t changed that.
“I don’t know that it’s really made things worse,” she said.
In the House, Rep. Gabrielle LeDoux, R-Anchorage, agrees.
LeDoux was a member of the coalition House majority last session and at the start of this year, but she left the coalition after a disagreement over the Permanent Fund dividend. She believes the dividend should be paid using the traditional formula; other members of the coalition do not.
“We’re pretty much in disagreement over the dividend. The dividend seems to be the thing that is separating people,” she said, explaining that she believes the vetoes didn’t help, but they didn’t make things worse.
“I’m not so sure that things could get any worse,” she said.
That statement will be put to the test. The Republicans who favor the traditional dividend will meet in Wasilla on Monday instead of following the leaders of the House and Senate to Juneau. While the traditionalists won’t have enough votes to convene a special session on their own, their absence from Juneau means lawmakers there will not have 45 votes, the minimum needed to override Gov. Mike Dunleavy’s vetoes and complete work on the state’s capital budget.
Pruitt said that if lawmakers agree to pay a traditional dividend this year, agreement on a capital budget will soon follow, and that budget could include the reversal of some of the governor’s vetoes.
Contributing to the ongoing fracture is the Republican Party’s past insistence upon purity. In 2016 and again in 2018, the state Republican Party endorsed challengers to Republican incumbents in an attempt to avert the creation of a coalition majority in the House.
Rep. Louise Stutes, R-Kodiak, was one of those targeted Republicans.
“I would have joined the Republican majority this last year if the Republican Party had not gone after me,” she said Friday.
The chairman of the state party at the time, Tuckerman Babcock, is now chief of staff to Gov. Mike Dunleavy, and Stutes said the decision to pit Republicans against each other has “come back around, and it’s eroding the Republican Party.”
If they were aligned, Republicans in the House of Representatives control enough seats to hold a majority and thus set the agenda of that body. But earlier this year, six Republicans left a nascent Republican majority in order to join a coalition with the House’s Democrats and independents.
Rep. Jennifer Johnston, R-Anchorage, is one of the Republicans who switched and said it came about because of the dividend. She and her fellow members of the coalition agreed that the state’s budget this year should not overspend from the Permanent Fund or use the state’s savings accounts. She said the Republicans who joined the coalition were able to convince Democrats and independents to agree.
Her fellow Republicans, knowing that overspending was necessary to pay a traditional dividend this year, did not agree, she said, leading to the split.
“That is absolutely correct. That was the bottom line. They would not commit to not going into savings to pay a statutory dividend,” said Rep. Chuck Kopp, R-Anchorage and one of the Republicans who joined the coalition majority.
That split has had consequences. Since the start of the legislative session, discontented Republicans in Anchorage and the Kenai have begun recall campaigns against Rep. Gary Knopp, R-Soldotna, and Giessel.
Speaking Friday, Giessel said, “I am a Republican, and I have gotten messages from many of my fellow Republicans, people that ascribe to smaller government, personal liberty, those kinds of things, that they believe I’ve abandoned that philosophy, that platform, and truly, that is inaccurate.”