The Alaska Legislature is headed into a second special session, beginning in early July, with a first special session ending June 13 (the regular session ended May 15). Once again the gridlock is over the Permanent Fund Dividend and mainly whether it will be $3,000 or something less, perhaps half. Gov. Mike Dunleavy and some Republican legislators are pushing for the higher amount but the Democrat-led House and Republican-controlled Senate defeated bills that would have required the higher amount. However, a lower amount was not specified and as things stand now there is no authorization for a 2019 PFD payment. That will be rectified in the new special session, but the question is, once again, the amount.

The Legislature did pass a state operating budget, which means a state government shutdown on July 1, the start of the new fiscal year, is avoided. The governor is likely to exercise vetoes, perhaps significant, so there will be more sparks on this one. Meanwhile, funding for the state capital budget, which is mostly for construction, did not pass as the special session ended June 13. Republicans in the state House linked their votes to getting the higher PFD and the House Majority balked, which killed the bill. This will also be resolved in the special session.

Unlike with the operating budget where a government shutdown occurs July 1 if the budget is not approved, there is more time with the capital budget. The biggest headache is lack of state authorization to receive federal surface transportation and airport funds but the state Department of Transportation and Public Facilities, which manages these programs, is typically able to juggle funds so that ongoing projects are not affected. Any problems would be with delays on new contracts, and these would have no immediate effect for work on the street. This problem is only temporary as there will be an approved capital budget at some point.