Interior lawmakers are raising questions about the $1,100 Permanent Fund payment proposed for Alaskans as the dividend amount nears final approval in the Legislature.
Here are some views Interior lawmakers shared with the News-Miner on the PFD and fiscal policymaking during a third special session.
Sen. Robert Myers: ‘Put it into the Constitution’
Sen. Robert Myers predicted that Alaskans may not receive a Permanent Fund dividend this year if House-approved legislation for a $1,100 payment is rejected by the governor.
“If there is another veto, I would not be surprised if there is no PFD this year, ” Myers said, referring to the governor’s opposition to funding the dividend through a constitutional budget reserve.
A House-approved bill that taps the account to help pay the dividend is awaiting a Senate vote, which is expected this week. It also would need the governor’s signature.
The North Pole Republican said the state needs a long-term plan for managing the Permanent Fund dividend program “that is more than just reducing or ending the dividend.”
Gov. Mike Dunleavy proposes to fund the dividend and state services equally through a 50-50 formula protected in the state Constitution.
Lawmakers have been considering Dunleavy’s amendment, among other fiscal solutions, during the third special session.
Myers noted that he campaigned on a statutory dividend and that he still likes the idea. “However, I also realize that nothing will matter if we don’t put it into the Constitution,” he said.
Rep. Bart LeBon: ‘I do not support the 50-50 plan’
Republican Rep. Bart LeBon of Fairbanks expressed concern about the governor’s 50-50 plan and its impact. “I do not support the governor’s 50-50 PFD plan as it would call for an overdraw of the Earnings Reserve Account (ERA) of the Permanent Fund.”
Financing the plan would require an overdraw of the ERA “in excess of $1 billion,” LeBon said.
The state would need to make deep spending cuts or enact a new broad-based tax, such as a personal income tax, LeBon said.
“A sustainable long-term fiscal plan will need to reconcile state spending and the PFD program against state revenue sources to include royalty income from the sale of our oil, investment earnings from the Alaska Permanent Fund, and state taxing policies,” LeBon said.
LeBon opposes Dunleavy’s plan to guarantee the PFD formula in the state Constitution.
“And should any PFD formula enjoy budget priority over, say, public safety, education or the general health and welfare of Alaskans?” LeBon asked.
“I think not, and that is one of the reasons that I do not support putting the PFD formula into the Alaska Constitution,” he said.
Rep. Mike Prax: ‘Pay the PFD according to statute’
Republican Rep. Mike Prax of North Pole does not support the $1,100 Permanent Fund dividend approved by the House or using funds outside the Earnings Reserve Account to pay for it.
“According to statute, this year’s dividend payments should be in the neighborhood of $3,500 to $3,700 and the funds to pay the dividend should be appropriated from Permanent Fund earnings to leave no doubt that it is a ‘Permanent Fund dividend,’’’ Prax said.
In an email to the News-Miner, Prax wrote: “I favor paying the PFD according to statute. AS 43.23.005(a) explicitly states: ‘An individual is eligible to receive one Permanent Fund dividend each year in an amount to be determined under AS 43.23.025.’
“This is not an amount that is ‘subject to appropriation.’ The balance in the Earnings Reserve Account is more than sufficient to meet this obligation,” he said.
“Therefore, the Legislature should appropriate an amount from the Earnings Reserve account sufficient to satisfy AS23.025 — the Wielechowski decision notwithstanding — because that is the statutory promise made to individual Alaskans who met the qualifications of this year’s PFD application.”
Prax referred to the Wielechowski v. Alaska case, heard before the Alaska Supreme Court in 2017.
Justice Daniel Winfree wrote that, “Absent another constitutional amendment, the Permanent Fund dividend program must compete for annual legislative funding just as other state programs.”
Rep. Mike Cronk: ‘The amount isn’t acceptable’
Republican Rep. Mike Cronk said he disagrees with the $1,100 dividend amount and proposed funding for it.
Cronk wrote that “the amount isn’t acceptable and the funding source certainly isn’t either.”
“The PFD should not be paid out of any other accounts but the ERA. And certainly not the SBR (savings account),” he said referring to the constitutional budget reserve account.
Cronk said the Legislature should return to session, if the governor rejects the proposed PFD dividend and its funding source. “If the governor vetoes the amount, we need to come back to the table and fund it out of the ERA like it is supposed to be,” he said.
“I have favored a full statutory PFD from Day One. I voted for it. That’s my first choice. I also voted for the governor’s 50-50 split of $2,350,” he said.