Follow the law.

It’s a common phrase kicked around political circles, especially — but not exclusively — when it comes to the Permanent Fund dividend debate. A question that often follow is, which law?

That’s an on-going debate that gets reprised Monday when lawmakers gavel in for a second special session.

Backers for a dividend have calculated that the decades old statutory formula would pay about $3,000 to every eligible Alaskan. But a new law passed last year, Senate Bill 26, limits how much the Legislature can draw from the Permanent Fund’s earnings, which is the source of the dividends.

SB 26, however, failed to determine how much of that structured draw would be used for government services and what percentage would go toward dividends. Following one can lead to violating the other, something not lost on lawmakers struggling to agree on the size of this year’s sum.

“[SB 26] was never completed by defining the split of how the percent of market value would go,” said Senate President Cathy Giessel, R-Anchorage. ”So that’s created the difficulty that we need to solve. We actually have been striving – striving – since January of this year, to solve, complete the work on that paragraph B in the statute, but that’s where we haven’t succeeded yet.”

As conversations about adhering to laws continue, applications of other laws also get questioned, including the venue for Monday’s session.
Gov. Mike Dunleavy called lawmakers back but insisted they meet at Wasilla Middle School. Leading lawmakers, however, say they will first meet in Juneau.

Attorney General Kevin Clarkson said several weeks ago any session outside of Juneau would not be valid, but Giessel said holding the session away from Wasilla falls under a separation of powers between the executive and legislative branches.

So many will meet in Juneau, at least enough for quorum to begin the session when Giessel and House Speaker Bryce Edgmon, I-Dillingham, drop the gavel.

Several other laws that have come under legislative and executive attack without formal repeal:

  • Lawmakers have struggled to complete work in 90 days since a 2006 voter initiative mandated shorter sessions, but the constitution still allows for 121 days.
  • On June 13, a special committee approved per diem payments, even as a new law last year prohibited per diems if the Legislature does not pass an operating budget 121 days.
  • On June 28, Dunleavy announced eliminating funding for the state’s Senior Benefits Program – one year after lawmakers voted to extended it.
  • Also on June 28, Dunleavy announced repealing a cruise ship environmental program called Ocean Rangers already in statute.

Lawmakers refused to pass Dunleavy’s bills to repeal the Senior Benefits Program and the Ocean Rangers program through legislation he introduced, so he did it himself unilaterally with vetoes.

The dividend debate isn’t limited to conflicting statutes.

In August 2017, the Alaska Supreme Court said a governor or Legislature can reduce the sum from the legal calculation. It came in response to a suit brought against former Gov. Bill Walker, who vetoed a portion of the dividend in 2016. In each of the next two years the Legislature responded with a reduced payout.

The court wrote: “(T)he legislature’s use of the Permanent Fund income is subject to normal appropriation and veto budgetary processes, the governor validly exercised his veto authority to reduce the legislatively authorized transfer from the earnings reserve to the dividend fund and did not alter the legislature’s purpose, and there was no evidence that voters would have understood the amendment to also permit future legislative dedications of Permanent Fund income.”

On Jan. 8, Dunleavy offered a different outlook, re-stating his long standing position that the dividend is not an appropriation but a simple transfer from the Permanent Fund Corp. to the Department of Revenue's dividend division so the dividends can get paid.

“That’s their opinion,” he said when asked about the Supreme Court's position. “I see it as a transfer. I’ve always seen it as a transfer."

Long time Anchorage attorney Jeff Feldman said in an interview that distinguishing political issues from those that are legal or constitutional "oftentimes is fuzzier than may be apparent.”

“Justice Sandra Day O'Connor once observed that almost all legal disputes involve two central questions: One being, 'Where is the line drawn?' and the second being, 'Who gets to decide?’ ” said Feldman, who now teaches at the University of Washington and who recently offered public support for Dunleavy’s selecting Clarkson as his attorney general.  

“The governor currently is drawing lines on some of these issues in different places than we have seen previously,” he said, “and by asserting executive power in areas that historically have been reserved to other branches of government.”

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