Gov. Bill Walker’s plan to use the permanent fund to help pay for the state’s annual budget is working through its final committee in the House Tuesday. It could go to the House floor for a vote later this week, but at this stage it will likely fail, Revenue Commissioner Randall Hoffbeck said.


“We don’t have the votes yet,” Hoffbeck told reporters at an early morning meeting Tuesday. “We’ve got work to do,” he said. He later recognized that the vote could wait until after the November election.


“The dynamics don’t change between now and November, except things get worse,” Hoffbeck told members of the House Finance Committee, referring to recent downgrades in the state’s credit rating.


Representative Les Gara, D-Anchorage, reiterated Hoffbeck’s point during the meeting.


“Everyone knows the votes are not in the House for this version of the bill,” Gara said.


According to Hoffbeck, part of the work to get votes is getting legislators to view oil tax credit legislation, House Bill 247, separate from the permanent fund legislation, Senate Bill 128.


The latter sets dividends at $1,000 for the next three years and likely into the future. Some lawmakers have consistently opposed passing the plan until more significant changes are made in oil tax law to reduce state subsidies to major North Slope producers.


“If we were to look at a permanent fund restructuring right now, we’d essentially be taking a $1,000 from every man, woman and child in the State of Alaska and handing it over to the oil industry,” Rep. Ivy Spohnholz, D-Anchorage, said in an interview Monday afternoon, referring to the $775 million in oil tax credits the state is set to pay over the next 12 months.


“We’re essentially deciding who to give this $700 million to,” said Rep. Pruitt, R-Anchroage, at a committee meeting on SB 128 Tuesday morning. “I think the public’s getting really frustrated because they see that we’re playing a bit of a game.”


Hoffbeck said there is no direct tie between the two bills, referring to legislation passed by the legislature on oil tax credits and the permanent fund plan.


“There’s a very convenient tie-in that you’re paying credits and you’re asking people to take less dividend therefore your dividend’s going to pay the credits, but that’s no more accurate than saying that once you’re using the [permanent fund’s] earnings, your dividend’s going to pay for education or your dividend’s going to pay for police protection or roads. I mean, it’s just one of the many pieces of the total budget,” he said.


Walker has not said yet whether he plans to veto the oil tax credit bill, HB 247, which some members, including the minority, see as a “watered-down” version of a more aggressive compromise previously passed by the House.


Hoffbeck acknowledged that the bill does not impact the major three North Slope producers, except for a “new oil” provision that may take effect three to seven years from now, depending on oil prices.


When asked whether HB 247 needs to be taken off the table in order to gain votes for the permanent fund bill, Hoffbeck recognized the sticking point. “Hopefully what we can do is kind of segregate the two bills.”


Walker has changed his stance on HB 247 throughout the regular session and on the same day last week when the legislature passed the bill. Members of his administration spent the morning that day lobbying legislators to support the measure, but within the span of a few hours, they requested that lawmakers oppose it.


“We kind of had some idea of what might be in the bill, but it wasn’t until the governor actually got the bill and was able to read it that he said, wow, this doesn’t go as far as I’d like it to go,” Hoffbeck said.


If the permanent fund plan is passed, he said the governor may be willing to give up other pieces of his comprehensive fiscal plan, including an income tax.


“Right now, everything’s still on the table. They’re still in play, but the big push is to get [SB] 128 passed right now and I think the governor will re-evaluate at that point in time,” Hoffbeck said.


Some lawmakers have pushed back on reducing dividends without a measure like an income tax to collect from higher wage-earners or out-of-state workers. Hoffbeck said passing just the permanent fund plan is fair.


“Does reducing the dividend impact the lower-income families as a percentage of their income more? Absolutely it does, but recognize the lower-income families are also the ones that benefit more from the government services,” Hoffbeck told reporters. “And by having a stable government revenue source, you’re able to provide those services and not have to cut them.”


The House Finance Committee met on SB 128 Tuesday morning and will take public testimony Tuesday evening from 5-7 pm.


KTVA 11's Liz Raines can be reached via email or on Facebook and Twitter.