Alaska Senate puts $1,000 stimulus payment in budget bill

The Alaska Senate approved a budget provision Monday that would give residents a $1,000 payment as a way to blunt economic impacts from the coronavirus.

The provision, an amendment to a larger state spending package, passed 12-7 after the Senate rejected a proposed $1,300 stimulus payment. The underlying budget passed 17-1 later in the day, with Republican Sen. Lora Reinbold voting in opposition.

The House will have to decide whether to agree to what passed the Senate. If the House does not agree, differences typically are hashed out in a conference committee.

The stimulus provision would use earnings from the state’s oil-wealth fund, the Alaska Permanent Fund, which traditionally have been used to pay yearly dividends to residents. The budget bill itself proposed a dividend for later this year of about $1,000. That remained part of the bill.

Several senators said an economic stimulus is critical, with many businesses temporarily closed or laying off workers as government officials seek to slow the spread of the virus. Sen. Mike Shower, a Wasilla Republican who sponsored the amendment, said he hoped the payments would be made as soon as possible.

Others supported more targeted relief that they said lawmakers were working on, or expressed concern with digging too deeply into permanent fund earnings.

“I’m concerned that it’s too broad and that money should be concentrated to the needy families,” said Sen. Bert Stedman, co-chair of the Senate Finance Committee. He said the provision would result in an excess draw on earnings, beyond what was scheduled to be withdrawn.

The adopted stimulus provision would go to eligible Alaskans who got dividends in 2019. Lawmakers also use earnings to help pay for government expenses amid a persistent budget deficit.

Gov. Mike Dunleavy, as part of his economic response to the virus, proposed something similar to the failed $1,300 amendment. The Republican proposed paying what he felt Alaskans were owed and did not receive last year when lawmakers approved a permanent fund dividend of $1,606.

Dunleavy has advocated following until it’s changed a dividend formula that many lawmakers consider unsustainable. Had the formula been followed, 2019 checks would have been $2,910, according to the Department of Revenue. Dunleavy proposed making up the difference.

Meanwhile, senators rejected an amendment that proposed paying a dividend using the formula last used in 2015. The size of such a dividend this year would have been about $3,100, the Legislative Finance Division has said.

Lawmakers are trying to finish up their most pressing work — including state budgets — within the coming days amid concerns with the coronavirus. Rep. David Eastman, who has been critical of the Legislature’s planning around the virus, donned sunglasses and a face mask on the House floor Monday. Rep. Sharon Jackson also wore a face mask.

The COVID-19 illness causes mild or moderate symptoms in most people, but severe symptoms are more likely in the elderly or those with existing health problems.

The budget passed by the Senate also includes $80 million for response to the virus, which Stedman said is contingent upon passage of a bill that would extend the public health disaster emergency declaration issued by Dunleavy.

The budget also includes an extra $30 million to be distributed as grants to K-12 schools and includes a lesser cut to the University of Alaska system than proposed by Dunleavy.