Legislature(2025 - 2026)ADAMS 519
04/03/2025 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Adjourn | |
| Start | |
| HB78 | |
| Presentation: Alaska Municipal League | |
| Amendments |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 78 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 53 | TELECONFERENCED | |
| += | HB 55 | TELECONFERENCED | |
HOUSE BILL NO. 53
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; amending
appropriations; making supplemental appropriations;
making reappropriations; making appropriations under
art. IX, sec. 17(c), Constitution of the State of
Alaska, from the constitutional budget reserve fund;
and providing for an effective date."
HOUSE BILL NO. 55
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; and providing for
an effective date."
^AMENDMENTS
Co-Chair Josephson noted that the committee would continue
hearing amendments for the operating and mental health
budgets.
4:03:44 PM
AT EASE
4:05:17 PM
RECONVENED
Co-Chair Josephson MOVED to ADOPT Amendment N 64 (copy on
file):
Agency: Health
Appropriation: Public Assistance
Allocation: General Relief Assistance
Transaction Details
Title: Add Funding for Alaskan Food Banks and Pantries
to Promote Food Security
Section: Section 1
Type: IncOTI
Line Items (Amounts are in thousands)
Personal Services: 0.0
Travel: 0.0
Services: 0.0
Commodities: 0.0
Capital Outlay: 0.0
Grants: 1,000.0
Miscellaneous: 0.0
1,000.0
Positions
Permanent Full-Time: 0
Permanent Part-Time: 0
Temporary: 0
Funding (Amounts are in thousands)
1004 Gen Fund 1,000.0
Explanation
Representative Stapp OBJECTED.
Co-Chair Josephson explained that Amendment 64 proposed
adding $1 million for the Food Bank of Alaska (FBA). He
understood that the committee was nearing the end of the
amendments process, but he believed the amendment was
important. Excluding statewide functions such as the Alaska
Marine Highway System (AMHS) backstop and other additions
made by the Senate totaling $10 million, as well as the $5
million restoration of the Community Assistance Program
(CAP) for one year, the committee had reduced state
spending by approximately $744,000 due to adopted
decrements to the budget through amendments. He clarified
that the figure excluded the unallocated cut. He explained
that although Amendment 64 proposed an additional $1
million in spending, his rough calculation showed that,
excluding those statewide functions, adoption of the
amendment would result in a net increase of approximately
$300,000.
Co-Chair Josephson explained that FBA had expressed strong
support for Amendment 64. He stated that he had received
written correspondence three days earlier from Chief of
Advocacy at FBA, Ms. Rachel Miller, who noted that one in
eight Alaskans and one in six Alaskan children experienced
hunger. He relayed that Ms. Miller described ongoing
backlogs caused by administrative challenges at the
Department of Health (DOH), SNAP, and Medicaid. He stated
that the backlogs had led to increased demand at food
pantries across the state. Food banks and pantries were
often the only available option for individuals who were
uncertain where their next meal would come from.
Co-Chair Josephson stated that Ms. Miller referenced
national policy discussions, including proposals that would
require states to absorb a greater share of SNAP costs or
significantly reduce SNAP benefits. She indicated that
potential reductions in SNAP, Medicaid, or other assistance
programs could result in increased demand at food banks and
pantries. He referenced a recent article by Iris Samuels
titled, "Alaska Receives Federal Warning at Risk of Losing
Funding Over Food Stamp Backlog." He explained that the
article described a federal penalty related to SNAP
administration. He noted that the penalty was in addition
to a separate unfunded penalty adopted earlier that day on
the House floor by a vote of 21 to 19.
Co-Chair Josephson explained that while SNAP benefits were
still being distributed, the program was not functioning
effectively due to federal concerns regarding compliance
and administration. He added that Ms. Miller shared that
FBA and its partners had previously received $1.68 million
and more recently, $1,011,500.
Co-Chair Josephson stated that he had provided the
committee with a spreadsheet (copy on file) listing
communities with participating food banks that received
food primarily from larger distribution centers such as
Anchorage, Juneau, and Fairbanks. He explained that funds
appropriated for the current fiscal year would not arrive
until January. Despite receipt of those funds, FBA
expressed concern about a growing gap in the hunger
response network as more Alaskans experienced financial and
food insecurity.
4:10:53 PM
Co-Chair Josephson reiterated that one in eight Alaskans
and one in six Alaskan children were affected by food
insecurity, according to FBA's State of Hunger in Alaska
report. He explained that the numbers equated to nearly
100,000 individuals, including approximately 30,000
children. In 2024, FBA distributed more than 7.9 million
pounds of food, equivalent to 6.7 million meals, to
Alaskans in need. He stated that the organization delivered
approximately 583,000 meals to children in rural school
districts. He also noted that food was distributed to older
Alaskans through the Commodity Supplemental Food Program
(CSFP). He asserted that the need for food assistance was
clearly established. While he supported UA sports programs
and appreciated prior committee action to fund the
programs, he believed it placed the legislature in an
inconsistent position to fund athletics while not providing
funding for food banks.
Representative Stapp stated that when food bank
appropriations began approximately three years earlier, the
funding had been described as temporary assistance to
address the SNAP backlog. He referenced the SNAP penalty
and noted that earlier committee discussion had established
that the penalty resulted from over-issuance of benefits
intended to reduce backlog delays. He asked whether the
appropriation was becoming an ongoing commitment rather
than a temporary measure. He also asked why it took nine to
11 months for the department to distribute funds that were
approved to address what was described as an immediate
need, noting that the prior year's funds had not been
scheduled for distribution until March.
Co-Chair Josephson responded that DPA was experiencing
significant administrative challenges. He stated that he
was glad the funds were distributed when they were, but he
expressed concern that the current grants would expire in
January of 2026. He stated that FBA had reported prior
distributions of funds, including approximately $420,000 to
the Fairbanks Community Food Bank (FCFB), $100,000 to the
Kenai Peninsula Food Bank (KPFB), and $150,000 to the
Southeast Alaska Food Bank (SAFB). He explained that these
figures illustrated how funding was distributed statewide
rather than concentrated in a single community.
4:14:41 PM
Representative Tomaszewski asked where the remaining funds
had been distributed beyond the examples provided.
Co-Chair Josephson responded that the figures referenced
were from calendar year 2024, when $4.5 million had been
included in the governor's proposed FY 24 budget. He
clarified that the $1.68 million distributed that year was
allocated across multiple regions and he had used the
examples to demonstrate the statewide distribution model.
He emphasized that the funding was not limited to
Anchorage.
Representative Tomaszewski asked how much funding remained
or whether all funds had been expended.
Co-Chair Josephson responded that he did not have the
information available. He suggested that LFD or DOH may
have the information.
Representative Tomaszewski asked to follow up on
Representative Stapp's question. He stated that the food
bank funding appeared to have originated during the COVID-
19 pandemic and had initially been described as temporary.
He was uncertain whether the original justification still
applied, but he understood that Co-Chair Josephson appeared
to have researched the issue already. He would like more
information on the remaining funds and he thought that the
committee should consider the matter further.
Representative Galvin stated that she had reviewed her
notes related to FBA after meeting with representatives
from the organization multiple times during the year. She
wanted to share several observations. She expressed
appreciation for Lutheran Social Services of Alaska (LSSA)
for visiting her office and she thought the information
presented to her was deeply concerning. In Midtown
Anchorage alone, approximately 600 seniors received a food
box once per month through LSSA. She explained that
eligibility was limited to individuals aged 60 years or
older with monthly income of $2,000 or less. She stated
that the 30-pound food box was insufficient and seniors
continued to experience food insecurity. She emphasized
that older Alaskans were going hungry. Government grants
and contracts declined from $6.22 million in 2023 to $4.24
million in 2024, representing a 31.8 percent decrease year
over year. She stated that while federal funding had
previously provided support, demand continued to increase
and more individuals than ever continued to access pantries
and meal programs even after the pandemic.
Representative Galvin stated that while food bank funding
had initially been framed as a temporary response to the
pandemic, ongoing conditions demonstrated sustained need.
She relayed that despite declining funding, rising
operational costs, and inflationary pressures, food banks
distributed approximately 7.9 million pounds of food and
nearly 6.7 million meals in 2024. She asserted that the
food was being utilized and not wasted, and that demand
remained high, particularly in rural Alaska.
Representative Galvin shared that families were reportedly
waiting up to three months or longer to receive SNAP
benefits. She argued that food pantries were not an ideal
substitute for SNAP because they did not always provide
culturally or nutritionally preferred foods, but the food
pantries were necessary under current circumstances. She
expressed support for Amendment 64 because food insecurity
persisted.
4:20:05 PM
Representative Johnson asked whether the committee could
request that LFD Director Alexei Painter address the issue.
She suggested that language could be added to reappropriate
FY 25 funds into FY 26 or extend FY 25 funding into FY 26
to account for any unspent balances.
ALEXEI PAINTER, DIRECTOR, LEGISLATIVE FINANCE DIVISION,
responded that when the matter was discussed in December of
2024, DPA indicated it planned to begin disbursing the
funds in February of 2025. He stated that the department
assumed the full amount would be disbursed, but any unspent
funds would lapse back to the general fund. If an unspent
amount remained, the legislature could choose to extend the
appropriation. He explained that the department issued
requests for proposals in November of 2024 and likely had
full grant agreements in place at that time. A second
appropriation that was made in 2024 through the Department
of Commerce, Community and Economic Development (DCCED) for
food banks had also been fully expended.
Representative Bynum stated that the budget listed $605,400
under the public assistance line [page 20, line 20]. He
asked whether the proposed funding would be added to the
existing line item or whether it constituted a new addition
to the budget.
Mr. Painter responded that the funding was comparable to a
one-time appropriation of $1.5 million made in the same
line item during the previous year. He stated that the
current budget proposal would place a smaller amount in the
same budget line.
Co-Chair Foster expressed his support for Amendment 64. He
stated that he appreciated that the food bank distributed
food to 75 communities and organizations. He noted that
Alaska had more than 200 villages and he encouraged FBA to
expand distribution to additional communities, if possible,
particularly given SNAP-related challenges. He shared that
that the SNAP backlog represented the most frequent
category of constituent calls received by his office during
the legislative session. He relayed that constituents
experienced long wait times, delays of weeks or months, and
disconnections while seeking assistance. He expressed
concern for affected individuals and stated that food banks
provided an important means of support.
Co-Chair Foster noted that while food banks were not
present in every village, hub communities such as Nome
sometimes assisted surrounding areas. He stated that
increased support would improve outreach. While he
generally favored limited government, he viewed food
assistance for individuals and families unable to meet
basic nutritional needs as an appropriate government
responsibility, along with public safety, roads, and
sanitation. He noted that it was particularly important
when children were involved.
4:24:32 PM
Representative Hannan indicated that she also supported
Amendment 64. If SNAP was not functioning as intended, the
state needed to assist through alternative means. She asked
Mr. Painter whether funds retained by the state from SNAP-
related penalties could be used for direct food assistance.
She noted that Alaska was required to pay a $12 million
fine due to having insufficient eligibility technicians for
SNAP, with $6 million repaid to the federal government and
$6 million retained by the state. She asked whether
retained funds could be used to support food banks.
Mr. Painter responded that he did not know the details of
the settlement and advised that DOL would need to be
consulted. He stated that the language submitted to the
legislature specified that retained funds were designated
for new SNAP investment projects. He explained that the
designation did not include direct food assistance such as
funding food banks. He could not speak to whether the
limitation resulted from negotiation decisions by DOL.
Representative Hannan commented that the legislature would
not be able to achieve such changes before addressing the
FY 26 budget. There was concern that the state could again
face additional federal penalties due to the ongoing SNAP
backlog. She thought the committee should consider whether
future negotiations conducted by DOL regarding public
assistance penalties might allow funds to be directed
toward providing food assistance to individuals who
experienced food insecurity, including through food banks.
She reiterated that such changes were not achievable within
the FY 26 budget process.
Representative Bynum commented that he continued to hear
discussion regarding SNAP and whether the program was
effectively administered. He stated that speculation
regarding the future operation of SNAP appeared to be
influencing support for the amendment. He did not believe
he had sufficient information to determine whether SNAP
services would continue as expected. He had limited time to
research the program and was speaking only to the
information available to him. When considering food
security, particularly in remote communities, he believed
support should be narrowly focused on low-income, hard-to-
reach, and highly vulnerable areas. He thought there should
be less emphasis on communities such as Ketchikan,
Anchorage, and Fairbanks, where additional resources and
services were available. He would prefer to see funding
directed toward communities such as Kake, Hoonah, and
Yakutat, which were more vulnerable to food shortages and
supply disruptions. He did not yet understand how the
program ensured assistance reached the most vulnerable
communities. He requested that Co-Chair Josephson provide
an additional explanation regarding how the program was
intended to protect those communities.
4:28:58 PM
Representative Allard stated that she found the discussion
informative. She stated that she recognized several
Anchorage-based organizations listed in the handout
provided by Co-Chair Josephson (copy on file), including
Beans Café and the Chugiak Eagle River Food Pantry. She
stated that the Municipality of Anchorage provided
significant funding to these organizations through grants,
bond authorizations, and actions exceeding the tax cap. She
did not believe Anchorage qualified as one of the most
vulnerable communities, given the level of municipal
support available. She emphasized the need to target
funding toward the most vulnerable areas of the state. She
did not support approving the funding in the current budget
cycle because she believed nonprofits were capable of
raising funds independently and that continued reliance on
government funding was not appropriate. She stated that if
funding were provided, it should be narrowly targeted,
which she did not believe was occurring under the
amendment.
Representative Tomaszewski noted that he could not speak to
conditions in Anchorage, Kenai, Southeast Alaska, or other
communities that had received funding under the
appropriation; however, he could speak to conditions within
the Fairbanks community. He explained that FCFB performed
extensive food distribution work and that he had
volunteered and worked with the organization for many
years. He stated that the organization not only raised
funds for its own projects but also worked with the state
on food distribution, including distributing fish to
villages when fish availability was limited. He explained
that FCFB served as a distribution hub and sent food
throughout the interior region of Alaska. The organization
partnered with local grocery stores to donate food weekly,
such as Costco and Fred Meyer. He described the work as a
coordinated effort to distribute food to people in need and
noted the significant contribution of volunteers over many
years. He stated that he believed it was a reasonable
appropriation to help those in need.
4:32:57 PM
Representative Stapp expressed appreciation for the
comments from Representative Tomaszewski. He noted that the
committee had discussed the issue the previous year in
relation to separate legislation. He offered a warning that
the department would not be able to clear the SNAP backlog.
He had cautioned that increasing eligibility conditions
would create an additional backlog. As of the current
month, the backlog remained unresolved and additional
individuals would be added to the program in July of 2025,
which he believed would likely worsen the backlog. He
stated that he supported the amendment because he believed
the department would continue to face challenges processing
applications. He clarified that his comments were not
intended to criticize departmental staff, but that his
concern was structural rather than personal. Without
addressing capacity issues, additional funding for food
banks might be required in future years.
Representative Bynum shared that he sought a clearer
understanding of how the program functioned in terms of
distributing food to communities. He wanted additional
information before the committee voted on the amendment
regarding how food was transported and allocated. He stated
that while the program appeared beneficial, he believed
further discussion would be necessary in the future to
ensure that the most vulnerable communities were
prioritized.
Co-Chair Josephson responded that he was not an expert on
food distribution operations, but he had provided the
committee with a list showing the number of pallets and
pounds distributed to villages (copy on file). He indicated
that he believed the information addressed some of the
concerns raised. He referenced a September 2023 press
release in which the administration reallocated $1.7
million to support food distribution statewide in response
to difficulties processing SNAP applications. He explained
that the press release originated from DOH Commissioner
Heidi Hedberg and noted that the organization distributed
567,000 pounds of food to 82 partners statewide, from
Ketchikan to Bethel and Gambell, in response to food
insecurity. He relayed that FBA had a number of
testimonials from partner organizations across the state,
including Southeast Alaska, the Kenai Peninsula, Bethel
Community Services, the Matanuska-Susitna Food Bank, the
Bristol Bay Native Association, the Nome Community Center,
and the Upper Susitna Food Pantry.
Co-Chair Josephson advised that he could not provide a
precise operational breakdown but emphasized that the
article he had mentioned earlier by Iris Samuels was
concerning. According to federal data cited in the article,
the state met required SNAP application processing
deadlines only 36 percent of the time, compared to the
federal performance standard of 95 percent. He explained
that the data helped explain the federal penalty assessed
against the state. He reported that more than 2,700
Alaskans had waited longer than three months for SNAP
applications to be processed, despite a federal requirement
that applications be completed within 30 days. He added
that the article referenced a vacancy rate of 30 percent
within the department as of March of 2025 and reported that
only three employees were hired between January and March
to address the backlog. He characterized the amendment as a
reduction rather than an expansion, acknowledging the $1
million cost and the fiscal challenges facing the state. He
stated that the need for food assistance remained evident.
4:37:47 PM
A roll call vote was taken on the motion.
IN FAVOR: Jimmie, Johnson, Hannan, Tomaszewski, Stapp,
Galvin, Bynum, Foster, Josephson
OPPOSED: Allard, Schrage
The MOTION PASSED (9/2). There being NO further OBJECTION,
Amendment 64 was ADOPTED.
4:38:37 PM
AT EASE
4:41:53 PM
RECONVENED
Co-Chair Josephson MOVED to ADOPT Amendment N 95 (copy on
file):
Agency: Permanent Fund
Appropriation: Permanent Fund Dividends
Allocation: Dividend Fund 1050
Transaction Details
Title: POMV Draw with $1000 Dividend
Section: Language
Type: IncOTI
Line Items (Amounts are in thousands)
Personal Services: 0.0
Travel: 0.0
Services: 0.0
Commodities: 0.0
Capital Outlay: 0.0
Grants: 0.0
Miscellaneous: 681,700.0
681,700.0
Positions
Permanent Full-Time: 0
Permanent Part-Time: 0
Temporary: 0
Funding (Amounts are in thousands)
1041 PF ERA 681,700.0
Explanation
Page 57, lines 14 - 17:
Delete all material and insert:
"(1) the amount necessary, estimated to be
$681,700,000, to the dividend fund
(AS 43.23.045(a)) for the payment of a permanent fund
dividend of $1,000 and for
administrative and associated costs for the fiscal
year ending June 30, 2026;"
Page 57, line 18:
Delete "$1,294,439,328"
Insert "$3,117,188,398"
Representative Stapp OBJECTED.
Co-Chair Josephson explained that Amendment 95 proposed
changing the amount of the 2025 Permanent Fund Dividend
(PFD) from the $3,000 amount proposed by the governor to
$1,000. He wanted to place several points on the record
regarding the Permanent Fund and the dividend. He explained
that between 1982 and 2015, the legislature appropriated a
PFD each year based on the statutory formula. During his
initial legislative terms in 2013 and 2014, the legislature
did not regularly debate the dividend. He reported that
over the 34-year period, the average dividend was $1,150.
He emphasized that during that time, the dividend had no
impact on the operating budget and functioned separately
from it. He explained that a portion of earnings was
distributed as dividends while the remainder stayed in the
fund to support growth. During that period, the Permanent
Fund grew from approximately $3 billion to nearly $53
billion, which materially affected the formula used to
calculate dividends.
Co-Chair Josephson relayed that in 2016, Governor Bill
Walker introduced legislation to use the fund as an
endowment to support state government through a percent of
market value (POMV) mechanism. He stated that the approach
was enacted in 2018 through SB 26. Following enactment, the
POMV framework created a zero-sum dynamic in which each
dollar allocated to the dividend reduced the amount
available for other general fund needs, and vice versa. He
stated that the dynamic was especially pronounced in a
fiscal environment where the state did not raise broad-
based revenue and did not tax its residents to fund
government operations.
Co-Chair Josephson stated that in 2016, the governor vetoed
a portion of the dividend appropriation, and that in each
year since then, the legislature appropriated a dividend
amount smaller than what would have been paid under the
historic statutory formula. He stated that the cumulative
reduction in dividend payments over the nine-year period
totaled $9.3 billion. He added that when interest was
included, the amount exceeded $12 billion. By comparison,
the Permanent Fund currently held just over $5 billion in
uncommitted earnings reserve funds, excluding the $3.8
billion already committed to the upcoming fiscal year
budget. He stated that excluding those funds was necessary
because the funds were required to support the budget and
included an inflation-proofing transfer scheduled for June
of 2025. He stated that without those funds, the state
would face serious fiscal risk. He asserted that the state
currently lacked the financial capacity to pay historic
dividend amounts.
Co-Chair Josephson relayed that in prior years, proposals
were offered to pay full dividends or pay back dividends.
He stated that such proposals were no longer feasible. He
explained that the limitation was not solely due to
insufficient funds, nor solely due to the version of the
budget under consideration, which allocated approximately
66 percent of the annual draw to the dividend. He stated
that the underlying issue was that the historic dividend
formula no longer aligned with the structure of the
Permanent Fund under the POMV framework. When the
legislature was considering SB 26, both the House and the
Senate passed versions of the bill that included new
dividend formulas tied to POMV. He stated that the Senate
version included a dividend allocation equal to 25 percent
of the POMV draw. He explained that under a 25 percent
draw, the dividend for the current year payable in October
would have been approximately $1,440. The House version
included a 33 percent dividend, which would have resulted
in a higher amount than $1,440. He explained that the
conference committee was unable to reach consensus on a new
dividend formula, and as a result, the final bill was
silent on the issue.
Co-Chair Josephson explained that because no new formula
was adopted, the historic dividend formula remained in
statute despite being unaffordable. The outcome resulted in
an annual debate over the dividend. He wanted to change the
dividend formula to an amount the state could realistically
afford. If the legislature enacted a new formula, it would
be honored and paid. He argued that adoption of a
sustainable formula would help frame future budget
discussions regarding affordability, but the legislature
had not yet reached agreement on a new dividend formula. He
relayed that the absence of a realistic formula delayed
resolution of essential budget issues until late in the
legislative process. The state faced a deficit exceeding
$1.5 billion under a full dividend scenario.
Co-Chair Josephson noted that the committee had spent the
prior two months developing the operating budget through
subcommittees and full committee work. The range of
remaining budget options was limited to tens of millions of
dollars. He clarified that the limitation applied to the
operating budget itself and not to the dividend. The
committee had completed less work on the capital budget but
he could reasonably estimate its size. He noted that the
legislature was also considering substantial increases to
K-12 education funding. The state faced a projected deficit
of approximately $2 billion if the operating budget as
proposed was adopted.
Co-Chair Josephson explained that Amendment 95 would
provide a $1,000 dividend to all eligible Alaskans. He
stated that adoption of the amendment would increase funds
available to the general fund and reduce the deficit by
approximately $1.8 billion. He stated that $1,000 was
within the range the state could afford and he
characterized the proposal as realistic and fair.
4:48:06 PM
Co-Chair Josephson understood that it was widely believed
that the dividend would ultimately fall near the $1,000
range. He stated that few discussions involved amounts
lower than the $1,000 level. He explained that under a
residual dividend approach, assuming growth in K-12
funding, the dividend could be approximately $700. He
stated that further discussion was expected. The dividend
amount would be changed through the legislative process,
including in committee, conference committee, and on the
House floor. He stated that he was open to conceptual
amendments.
Representative Jimmie stated that the PFD was critically
important to her district. She shared that statewide per
capita income was approximately $41,000, but annual income
in her district was approximately $21,000 or less. During
recent travel to villages in her district, she encountered
a family heating their home with an oven because they could
not afford stove oil. She stated that the dividend helped
keep approximately 40 percent of her constituents out of
poverty.
Representative Tomaszewski believed the PFD should be paid
as written in statute. He stated that he would vote against
Amendment 95. He viewed reductions to the dividend as
regressive and harmful to individuals with the lowest
incomes in the state. He argued that a reduction of $2,000
to the dividend could represent 10 percent or 15 percent of
an individual's annual income. The dividend provided
significant assistance to retirees, individuals on fixed
incomes, and individuals living in poverty. Reducing the
dividend disproportionately affected lower-income
individuals compared to higher-income earners. He noted
that a $2,000 reduction represented approximately 1 percent
of income for someone earning $200,000 annually but a
substantially larger share of income for individuals with
lower earnings. He stated that he could not support the
reduction.
Representative Allard noted that the legislature frequently
emphasized the importance of following the law and adhering
to statute. She stated that her opposition to the amendment
was because she wanted to represent her community as well
as support her colleagues who represented rural
communities. She stated that she did not want rural
communities to suffer. Regardless of whether an individual
was a single parent in Eagle River, Bethel, or Nome, she
wanted to ensure that families could afford medical care,
orthodontic care, and education expenses for their
children.
4:52:32 PM
Representative Johnson expressed her opposition to the
amendment. She thought that the legislature had an
insatiable appetite for spending and that accountability
and restraint were lacking. She stated that the dividend
allowed individuals to decide how to best meet their needs
without government direction. Recipients might choose to
spend the dividend on fuel, food, or other necessities
rather than government-selected programs. She asserted that
the dividend represented the only effective spending cap on
government and that public attention to the dividend helped
restrain government spending. She expressed concern that
support for a larger dividend was sometimes portrayed
negatively. She relayed that the dividend helped working
families save money, support education, and improve their
quality of life. She stated that she could not support the
amendment.
Co-Chair Foster shared that he opposed Amendment 95 because
he supported paying the full statutory PFD. He shared that
his district ranked either the lowest or second lowest in
per capita income statewide. He stated that residents in
his district relied on the dividend to pay for necessities
such as heating oil, food, and medicine. He noted that a
reduction of $1,000 or $2,000 might not significantly
affect some Alaskans, but it had a substantial impact on
many of his constituents. He explained that a $2,000
reduction affected families disproportionately. For a
family of five, the reduction equated to $10,000. He stated
that evaluating the reduction as a percentage of income
further illustrated the disparity. For example, a $2,000
reduction represented 2 percent of income for a household
earning $100,000 annually. For a family in a village
receiving approximately $10,000 in cash income supplemented
by subsistence, the same reduction equated to a 20 percent
loss of total income.
Co-Chair Foster stated that he had visited all of the
villages in his district and he had personally observed the
high cost of living and economic hardship in those areas.
He stated that residents were barely managing financially,
especially considering the current challenges related to
SNAP. He asserted that his constituents needed a robust
dividend. He supported a larger PFD particularly for rural
Alaska and he was in opposition to the amendment.
4:58:47 PM
Co-Chair Schrage expressed his full support for Amendment
95. He acknowledged that the full statutory dividend was
established in law. The committee had made efforts to limit
spending but even with reductions, the budget had to
balance against available revenues. He asserted that the
constitution required passage of a funded budget and that
the state could not meet all obligations simultaneously. He
noted that members of the committee had supported various
budget increments, including funding for dementia
awareness, a deaf navigator, fisheries research, and
reimbursement for required air quality studies. He stated
that these expenditures reduced the funds available for the
dividend. He recognized the importance of the dividend,
particularly for low-income and rural families, but the
committee faced a mathematical constraint that required
tradeoffs. He relayed that maintaining essential state
functions required acknowledging revenue limitations and
reallocating funds accordingly.
Co-Chair Schrage stated that if the committee did not
address the imbalance, the responsibility would fall to
others, and he did not want to abdicate the responsibility.
He wanted the committee to take ownership of the budget,
which required acknowledging that the dividend needed to be
reduced. The alternatives included drawing large amounts
from the Constitutional Budget Reserve (CBR), overdraws
from the Permanent Fund that could eliminate the dividend
entirely, or instituting taxes. He stated that he had not
observed sufficient will within the committee to pursue the
other options. He noted that there was unwillingness among
members to draw from the CBR. He stated that the public
needed honesty regarding where funding would come from. If
the state was unwilling to use savings, overdraw the fund,
or impose taxes, the dividend would have to be reduced. He
stated that although the vote was difficult, he was willing
to take responsibility because the financial reality
required it. He thought that the committee needed to accept
ownership of the process and be honest about what was
required to fund the budget priorities members had
supported.
5:02:57 PM
Representative Galvin expressed hesitant support for
Amendment 95. She explained that her hesitation stemmed
from the regressive nature of reducing the dividend and she
thought that her colleagues from rural Alaska were correct
in raising concerns. There were mixed feelings about
reducing the PFD in her district, but as a whole, her
district understood that the state faced a $1.6 billion
deficit and that action was required. She reiterated that
reducing the dividend was regressive, but the state lacked
other revenue mechanisms. She relayed that Alaska was the
only state without a statewide sales tax or income tax and
that the state had previously relied on oil revenue, which
had declined significantly. The state currently faced a
severe fiscal challenge and could not rely upon oil
increasing again in the future.
Representative Galvin suggested that additional revenue
options should be considered, including sales taxes, income
taxes, modernization of tax systems, and mining revenue.
She stated that a $1.6 billion deficit could not be
resolved through cuts alone, regardless of fiscal
conservatism. She thought that the committee had
prioritized essential services such as food assistance,
health care, and legally required obligations and had
avoided unnecessary spending. She explained that her votes
were cast with statewide interests in mind rather than
district-specific benefits. The state needed to remain a
place where people wanted to live, with safe communities,
strong schools, and opportunities for children. The state
was at a difficult juncture that required deciding how it
would invest in itself amid fiscal constraints. She wanted
to ensure that the legislature was doing what was necessary
for rural Alaskans, particularly in regions facing severe
hardship. She stated that the PFD issue posed a difficult
question for her. She was actively working on ideas to
improve the distribution of wealth statewide. She stated
that her constituents expected the legislature to balance
the budget and adjourn on time. She would vote in favor of
the amendment, though reluctantly.
Representative Tomaszewski commented that there had been
significant discussions about potential solutions. He noted
that Representative Mike Prax had introduced legislation
during the past three legislative sessions allowing
individuals to voluntarily relinquish their PFD. He
explained that the legislation allowed applicants to check
a box to donate their dividend to the general fund. He
noted that he was a co-sponsor of the bill. He stated that
individuals who did not need the dividend should have the
option to return it to the state to reduce the need for
difficult budget decisions. He expressed hope that the
committee would support the bill.
5:07:50 PM
A roll call vote was taken on the motion.
IN FAVOR: Galvin, Hannan, Schrage, Josephson
OPPOSED: Johnson, Stapp, Allard, Bynum, Tomaszewski,
Jimmie, Foster
The MOTION to adopt Amendment N 95 FAILED (4/7).
5:08:36 PM
Co-Chair Schrage MOVED to REPORT CSHB 53(FIN) out of
committee with individual recommendations and with
authorization to the Legislative Finance Division and
Legislative Legal Services to make any necessary technical
and conforming changes.
Representative Johnson OBJECTED.
5:09:23 PM
AT EASE
5:10:04 PM
RECONVENED
Co-Chair Josephson asked if the objection was maintained.
Representative Johnson MAINTAINED the OBJECTION.
5:10:14 PM
A roll call vote was taken on the motion.
IN FAVOR: Hannan, Jimmie, Galvin, Foster, Schrage,
Josephson
OPPOSED: Johnson, Allard, Bynum, Tomaszewski, Stapp
The MOTION PASSED (6/5).
There being NO further OBJECTION, CSHB 53(FIN) was REPORTED
out of committee with one "do pass" recommendation, two "no
recommendation" recommendations, and eight "amend"
recommendations.
[Note: action on reporting the bill from committee was
rescinded on 4/10/25 at approximately 6:30 p.m. The bill
was then reported out of committee with no additional
changes. See separate minutes dated 4/10/25 1:30 p.m. for
detail.]
5:11:20 PM
Co-Chair Schrage MOVED to REPORT CSHB 55(FIN) out of
committee with individual recommendations and with
authorization to the Legislative Finance Division and
Legislative Legal Services to make any necessary technical
and conforming changes.
There being NO OBJECTION, CSHB 55(FIN) was REPORTED out of
committee with six "do pass" recommendations, three "no
recommendation" recommendations, and two "amend"
recommendations.
Co-Chair Josephson noted that the bills would be sent to
the House Rules Committee for calendaring.
Co-Chair Josephson reviewed the schedule for the following
day.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 78 AML 2025-04-Actuarial-Amortization-Policy.pdf |
HFIN 4/3/2025 1:30:00 PM |
HB 78 |
| HB 78 ALSKNEAP Report Letter 032025vs.pdf |
HFIN 4/3/2025 1:30:00 PM |
HB 78 |
| HB 78 Cheiron Presentationv 040325-2.pdf |
HFIN 4/3/2025 1:30:00 PM |
HB 78 |
| HB 53 ACTIONS ON AMENDMENTS 040325.pdf |
HFIN 4/3/2025 1:30:00 PM |
HB 53 |
| HB 78 NEW FN HFIN RETIREMENT SYS Defined Benefit Op PERS 040325.pdf |
HFIN 4/3/2025 1:30:00 PM |
HB 78 |
| HB 78 NEW FN HFIN RETIREMENT SYS Defined Benefit Op Various 040325pdf.pdf |
HFIN 4/3/2025 1:30:00 PM |
HB 78 |
| HB 53 ACTIONS ON AMENDMENTS ALL 1-96 040825.pdf |
HFIN 4/3/2025 1:30:00 PM |
HB 53 |