After a morning of debate, the Alaska Senate has yet to decide on a permanent fund dividend amount for this year.
Members of the Senate Majority introduced Senate Bill 1002 Tuesday which proposed a $1,600 dividend, the same amount as last year’s. In a sharp turn from the typical source of the dividend, the payout proposed in SB 1002 would be patched together from a series of three different sources.
A majority of the funding would come in the form of a $770 million draw in general fund money, $172 million from the statutory budget reserve, which would likely empty the account, and $128 million from the Alaska Higher Education Investment fund, a pile of money set aside by the Legislature in 2012 to assist with state funded University of Alaska scholarships.
The proposal garnered hefty criticism from Gov. Mike Dunleavy and sparked an amendment Tuesday morning that would have pushed the dividend back up to the full statutory amount estimated at about $3,000.
The amendment required a majority-of-the-whole and failed with 10 votes in favor and 8 against. The amendment needed 11 votes in support to have passed, but with two senators excused, the amendment was rejected.
An odd mix of Republican and Democratic senators voted in favor of the full dividend. The 10 “yea” votes were made up of Sen. Bill Wielechowski, D-Anchorage; Sen. Mia Costello, R-Anchorage; Sen. David Wilson, R-Wasilla; Sen. Elvi Gray-Jackson, D-Anchorage; Sen. Lyman Hoffman, D-Bethel; Sen. Shelley Hughes, R-Palmer; Sen. Scott Kawasaki, D-Fairbanks; Sen. Peter Micciche, R-Soldotna; Rep. Donny Olson, D-Golovin; and Sen. Lora Reinbold, R-Eagle River.
Sen. Click Bishop, R-Fairbanks; Sen. John Coghill, R-North Pole; Sen. Chris Birch, R-Anchorage; Sen. Jesse Kiehl, D-Juneau; Sen. Bert Stedman, R-Sitka; Sen. Gary Stevens, R-Kodiak; Sen. Natasha von Imhof, R-Anchorage; and Sen. Cathy Giessel, R-Anchorage, voted against the amendment.
Wasilla Republican Sen. Mike Shower and Anchorage Democratic Sen. Tom Begich were excused and absent from the vote. Shower has been a vocal supporter of a full dividend and likely would have been the 11th vote needed to pass the amendment.
Asked about the motion, Coghill said he voted against the $3,000 dividend for a number of reasons, most significantly the need for sustainable payouts to maintain dividends into the future.
“The $1,600 dividend was closer to a sustainable number that would be able to go into the future,” Coghill said. “Unfortunately, we were called into a special session without the ability to put a bill on the floor that would address a really old formula for the dividend that is unsustainable. So now, the only thing we can do is put forward an appropriation bill with the reasonable amount in it.”
Coghill said many senators voted in favor of a full $3,000 dividend as part of the Senate’s operating budget on the understanding that the number would be brought down during negotiations with the House. Ultimately, Coghill noted, paying a full dividend doesn’t bode well for the future.
“If you want to look to the future of Alaska, you need to be able to pay those bills. A $3,000 dividend would take the earnings reserve down to nothing without the next few years and leave nothing for the next generation,” Coghill said. “Rather than pay a big amount now and not be able to pay anything later, cut it down, use a little for government and have a dividend that is reasonable.”
Bishop also seemed to think a larger dividend was unsustainable, noting in a floor speech Tuesday that the Legislature has been deliberating over dividend amounts and possible formula changes for years now and burning through $12 billion in savings in the process, adding that he was concerned the Alaska Permanent Fund earnings reserve account might face the same fate if the Legislature continues doling out larger payouts.
“I want to make sure that the people have a dividend now and into the future,” Bishop said. “And I ain’t going to be part and parcel of walking through $19 billion.”
Gov. Mike Dunleavy, who has pushed for a full $3,000 dividend since the beginning of his campaign for governor, criticized the Senate proposal in a statement Monday afternoon, vowing to veto the bill if passed by the Legislature.
“This bill kills the permanent fund dividend as we know it. The PFD is your share of Alaska’s mineral wealth, and there should be no change to the dividend without a vote of the people,” Dunleavy said in a statement. “That’s what I promised on the campaign and that’s the promise I intend to keep. I cannot and will not support this legislation.”
Contact staff writer Erin McGroarty at 459-7544. Follow her on Twitter: @FDNMPolitics.