The Legislature has passed an operating budget, which is now on its way to Gov. Mike Dunleavy’s desk. Unlike previous years, however, the permanent fund dividend, an annual oil-wealth fund check sent out to eligible Alaskans each October, was not included in the budget.
Now, the Legislature has formed a bicameral working group to continue discussions on how best to move forward with the annual legislative tripwire that is the PFD.
House Speaker Bryce Edgmon, I-Dillingham, appointed House members to the group Tuesday afternoon. Rep. Jennifer Johnston, R-Anchorage, will serve as House chair of the committee with Fairbanks Democratic Rep. Adam Wool, Rep. Jonathan Kreiss-Tomkins, D-Sitka, and Rep. Kelly Merrick, R-Eagle River, joining the group as well.
Some lawmakers want to provide Alaskans with the full $3,000 dividend in accordance with current state statute. Many Fairbanks-area legislators don’t fall into this school of thought, however.
Wool stated he was looking forward to work through different approaches with the other members of the committee.
“I appreciate the House and Senate coming together and creating a task force to look at the formula,” Wool said.
Tuesday, Wool said that he doesn’t support the full $3,000, calling it unsustainable and that he thinks the Legislature needs to change the formula.
“We need to change it so we’re not constantly violating the statute every year,” he said, adding that the issue will certainly take the Legislature into another special session. “It may be right after this one; it may be in a few weeks. But the issue will have to be dealt with before too long.”
Fairbanks Republican Rep. Bart LeBon also doesn’t support a full $3,000 dividend, but said he is unsure what number he feels is reasonable and will wait to decide that until he sees what comes out of the working group.
“I know it’s not $3,000,” LeBon said Tuesday. “The question is, what is a sustainable draw to the permanent fund earnings reserve account long term that protects the corpus so that there is annual growth hopefully above the rate of inflation. That’s what we’ll have to figure out.”
Healy Republican Rep. Dave Talerico said he wasn’t “amazingly comfortable” that the dividend was not included in this year’s operating budget. The District 6 Republican is the only representative of the Fairbanks area to vote against the House passage of the operating budget Sunday.
“I support a full PFD, but I do know that there certainly has been a lot of discussion and we’ve been given a ton of information. We may need to look into changing things as we move forward,” Talerico said, noting he would support a rule that requires any change to the formula to require a vote of the people.
Senate President Cathy Giessel, R-Anchorage, named four members of the Senate to the working group shortly after the Senate approved its formation Monday afternoon. Fairbanks Republican Sen. Click Bishop will serve as Senate chair of group with Sen. Shelley Hughes, R-Palmer, Sen. Donny Olson, D-Golovin, and Sen. Bert Stedman, R-Sitka, serving as the other three members.
Bishop said he hopes the group will be able to gain some additional consensus among legislators.
“It’s my hope that my colleagues and I can find responsible policy recommendations to use permanent fund earnings for the benefit of all Alaskans, with the goal of protecting the entire permanent fund for now and for generations to come,” Bishop said.
The other two Fairbanks-area Senators are split on how the dividend should be handled.
Fairbanks Democratic Sen. Scott Kawasaki was the only Fairbanks area senator to vote against the formation of the working group and has long been a proponent of providing Alaskans with a full dividend.
“The permanent fund dividend is something that people in Fairbanks rely on, for fuel, for health care, for education, for the basics of life,” Kawasaki said earlier in the session.
The District 1 Democrat told the News-Miner on Monday that he wished the dividend had been included in the budget.
For North Pole Republican Sen. John Coghill, who carried the Senate motion to create the working group, making sure there is a dividend moving forward is key, and if that means a slightly smaller dividend in order to ensure longevity of the annual payout, so be it.
“Economically this year, we could pay a full dividend, and I’m willing to do that but only if we figure out a methodology that makes it more sustainable moving forward,” Coghill told the News-Miner on Tuesday, noting he would support a slightly smaller dividend, too. “It would be a shame if we paid the highest dividend possible for a short amount of time and leave nothing for the next generation.”
Coghill noted that throughout the session the House, Senate and the governor have been unable to reach any form of consensus on how to approach the dividend, so, to him, it made sense to reach over to the other body and start a conversation.
“If you’re at an impasse, you have to find something that will figure you forward motion,” Coghill said. “You have to find some way to create communication. This is a way to try to reach across the House and try to work together rather than arguing in our own little corners.”
Coghill did not have a guess on how long the conversation would take but noted that in order for dividend payouts to stay on schedule, the Legislature would need to have a proposal to the governor by mid-August at the latest.
The working group is set to hold its first organizational meeting at 9:30 a.m. Wednesday with another meeting scheduled for the same time the next morning.
Contact staff writer Erin McGroarty at 459-7544. Follow her on Twitter: @FDNMPolitics.