In a surprise vote on Friday, the Alaska House dividend cut slashed the proposed Permanent Fund dividend from $3,900 to $1,400. Lawmakers aimed to trim a looming $1.9 billion deficit, reducing it to $400 million with this move.
The dramatic vote passed 20-17, shocking many in the Republican minority caucus who weren’t expecting budget action that day. Several Republicans, having been told there would be no votes, were absent when the decision was made.
Representative Neal Foster, a Democrat from Nome, joined 16 minority Republicans in opposing the amendment, calling the move harmful and poorly handled. House Minority Leader Mia Costello called the last-minute vote disingenuous and criticized the rushed process.
Representative Frank Tomaszewski tried to postpone the vote until Monday to allow absent Republicans to return, but his motion failed. The decision capped a turbulent week in the House as lawmakers wrestled with the state’s deep fiscal challenges.
Typically, the House starts budget talks with a lower dividend proposal and negotiates up. This year, Representative Andy Josephson, co-chair of the Finance Committee, broke tradition by adopting Governor Dunleavy’s larger $3,900 proposal.
Josephson later admitted that was a mistake, saying the amount was unrealistic without massive cuts to essential services like healthcare and education; rural representatives like Representative Nellie Jimmie voiced pain over misleading constituents who rely on dividends for survival.
Jimmie, despite supporting a larger payout, voted in favor of the cut because she saw brutal honesty as her duty to struggling families. No lawmakers have proposed taxes to cover the larger divide, and the only alternative, raiding the state’s Constitutional Budget Reserve, requires supermajority support.
This news article was originally published by Alaska Beacon.
