JUNEAU, ALASKA — The only thing less popular than a change to the Permanent Fund dividends during public testimony Thursday night was the ritzy Anchorage Legislative Information Office.

Gov. Bill Walker had few supporters during the statewide hearing on Senate Bill 128, a proposal that would significantly alter the way dividends are funded in order to shore up revenue to run state government.

The hearing was hosted by the Senate State Affairs Committee and ran about three and a half hours to hear from people throughout the state. The proposal would fund dividends with the more volatile oil royalty payments with an immediate drop to $1,000 and forecasted to be lower in later years. 

Much of the testimony was flatly against the bill, particularly with a strong perception that the government has bloomed with needlessly expensive office buildings and ultimately useless mega projects. 

“Keep your hands off my money, it’s my resource money,” said George Pierce, of Kasilof. “If you pass something pass an income tax, not a sales tax and get rid of the office up there in Anchorage, the LIO, that’s the stupidest thing I’ve ever heard of.”

While the Anchorage LIO was the most-mentioned example of government waste, other popular targets included the Ambler Road, the Knik Arm Bridge crossing, the Susitna-Watana dam project and even the large-diameter liquefied natural gas pipeline. 

Even though the projects account for a relatively small part of the government’s multi-billion project, it was clear they were a matter of credibility for lawmakers to overcome as they consider asking Alaskans to start paying for it whether it be through smaller dividends or taxes. Some said they’d be willing to pay for government if it didn’t seem so wasteful.

Others felt any change of the dividends disproportionately affected the poor.

Anchorage resident Tom Lakosh said he felt the bill was unconstitutional and said, “It is the most regressive tax we could possibly institute.”

The bill had its supporters, but most felt it could be improved. 

Many pointed out the change, along with the other elements of Walker’s fiscal plan, are a response to a sharp dip in oil prices. They wanted to know why the government would continue to tax if things recovered.

“There’s no provisions for returning to current status if there’s a complete reversal of oil prices,” said Joseph James, the owner of Pan-American Industrial Commercial Enterprise in Anchorage. “There’s nothing, no provision in this bill. What you’re asking is for us to give you permission to take money from the Permanent Fund dividend, but then should our fortunes reverse we have to come up here and make another vote.” 

Former state senator from Fairbanks Bert Sharp said he supported the change, but said he didn’t agree with the reworking of how the dividends were funded. He said it’s better to keep it linked to the Permanent Fund and not oil royalties.  

“I think it’s very important that every Alaskan contributes to the state services they expect the state to provide for them,” he said.

Contact staff writer Matt Buxton at 459-7544. Follow him on Twitter: @FDNMpolitics.