News-Miner opinion: July 1 might not hold much interest to Alaskans in a normal year, but Alaskans will likely be paying a bit more attention to the date when the calendar changes later this week.
That’s because the annual Alaska Permanent Fund dividend will begin to be distributed on that date, which is Wednesday, to those residents who have signed up for direct deposit.
If you hadn’t heard (And we can’t imagine there’s an Alaska resident anywhere who hasn’t), Gov. Mike Dunleavy decided to pay out the dividend three months early to help Alaskans who might be short of cash due to the virus-related economic slowdown and to also stimulate our virus-damaged economy.
The payout of $992 is quite a bit smaller than the lofty $3,000 called for under the formula that exists in state law and which the governor and many in the Legislature had wanted to pay out, but, simply put, Alaska can’t afford it. The state has been running multibillion-dollar deficits for several years now, and our Constitutional Budget Reserve savings account has been sharply depleted. Dividends have several times been reduced below what the formula dictates.
The arrival of the dividend now instead of in October as usual presents a good opportunity to remind Alaskans, particularly those campaigning this year to win a seat in the Alaska Legislature, that the dividend calculation formula needs to be updated to reflect our troubling fiscal reality.
To that end, legislators last year approved creation of a bipartisan House-Senate working group to study the dividend and make recommendations about its future. The panel in January presented an extensive report, which includes three options for what to do going forward.
Here they are:
• Pay a dividend in accordance with existing state law. Recent dividends would have been an estimated $3,000.
• Pay a fixed annual dividend of $1,600.
• Pay a dividend that is calculated after appropriations have been made for the next fiscal year’s operating and capital budgets, whose combined funding sources would include permanent fund earnings as allowed under a 2018 law.
The report points out the three forces that in recent years have consistently led to bitter fights in the Legislature and between the Legislature and the state’s current governor and his immediate predecessor. Here’s how the Legislature’s PFD working group put it:
“The five-year impasse in the Legislature over the amount of the annual dividend is largely attributed to three philosophical perspectives: (1) the budget itself is unsustainable and needs to be reduced to exist within the current level of revenues thereby allowing payment of a statutory PFD; (2) the size of the PFD is unsustainable and must be changed in order to fund services; and (3) Alaska needs to enact more revenue to pay a statutory PFD and to fund services.”
We need to clean up our fiscal mess. We’ve gone through too many divisive budget battles. To clean up the budget mess, however, will require resolving the status of the dividend.
Without a settling of the PFD’s status, we’ll continue having extraordinary budget fights year after year.
And that brings us to this observation: It’s election season. All 40 seats of the Alaska House of Representatives and 11 seats of the Alaska Senate are up for election this year. And you can bet that, once again, the dividend will somehow become a campaign issue not only in the August primary election, particularly on the Republican side, but also in the November general election.
The dividend has a history of being turned into bite-sized bits of campaigning. That’s not what we need to hear from candidates. What we need to hear is a clear statement of their position about the future of the dividend and how that position relates to the funding of the annual state budget.