PFD Funding Change Proposed in Senate Bill 1002; If passed, Governor Will Veto
By MARY KAUFFMAN
June 05, 2019
Alaska Governor Michael J. Dunleavy issued a statement Monday in response to this bill put forth by the Alaska Senate which the governor says disregards the statutory formula of the Permanent Fund Dividend and arbitrarily provides for a $1,600 dividend.
“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,” said Governor Dunleavy. “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.”
Quoting a news release from the governor's office, "SB 1002 severs the dividend from the Earnings Reserve Account and market activities, and further dismisses the statutory formula of the dividend that has been in place for nearly 40 years. As proposed, the legislation ignores longstanding laws and overwhelming public support for a full PFD. Alaskans have been diligent in providing testimony and urging the legislature to stop using the Permanent Fund as a political piggy bank to support a larger government."
“Let me be clear, this is a non-starter. If passed, I will veto SB 1002. I encourage an amendment that would restore a full PFD to the people. Follow the law - that’s what Alaskans have demanded and deserve,” said Governor Dunleavy.
In January, Governor Dunleavy unveiled PFD Back Pay legislation which would return unpaid dividends, diverted by the legislature for government operations, to Alaskans for 2016-2018. According to the governor's announcement, the Governor's back pay legislation proposal would not expend new dollars, rather return what Alaskans are lawfully owed.
The governor issued a special session proclamation calling the lawmakers back into session in Juneau beginning at 10:00 AM on Thursday May 16, 2019. With only days left in the special session, there is still no operatiing budget. The Legislature is required by law to pass a budget by June 30th each year. Currently, there is no operating budget for the fiscal year starting July 1, 2019.
When he called the special session, among the items the governor asked were:
Alaska House Minority Leader Rep. Lance Pruitt (R-Anchorage) released the following statement Tuesday in response to the Senate’s action on SB 1002. Pruitt said, “Two months ago, we offered multiple amendments during the budget process that would have ensured that we would avoid costly special sessions. Those amendments were not taken up. Instead, we still stand without an operating budget, a capital budget, a mental health budget, and K-12 education funding."
“The House Majority’s refusal to discuss what’s best for Alaska is doing long-term damage. It is well past time for the 24-member House Majority to pass a dividend, an operating budget, and fund education, as is required by the Constitution,” said Pruitt.
Members of the Alaska Senate Democrats also issued statements Tuesday in response to the Alaska Senate's action on SB 1002.
Senator Bill Wielechowski (D-Anchorage) said, “The Permanent Fund Dividend was established so Alaskans directly benefit from the subsurface resources we all collectively own. Severing the dividend from the Permanent Fund breaks the compact we have had with Alaskans for the last 37 years to share our resource wealth. Draining our state savings account and using funds designated to keep our best and brightest students here in Alaska just compounds this mistake.”
Senator Jesse Kiehl (D-Juneau) said, “Using the Higher Education Fund to pay a Permanent Fund Dividend doesn’t make sense. Raising more barriers to paying for college hurts the economy and limits opportunity. Our state needs a real plan that pays a sustainable dividend Alaskans can count on for the long-term. This falls short.”
“It is wrong to take money from the Higher Education Fund that seeks to incentivize young Alaskans to work hard and achieve a post-secondary education. All members of the Senate Democrats support a constitutional amendment to guarantee a Permanent Fund Dividend. This is the only way we can protect a sustainable and meaningful dividend for future generations,” said Senator Elvi Gray-Jackson (D-Anchorage)
Alaska House Speaker Bryce Edgmon (I-Dillingham) also released a statement Wednesday in response to the Senate’s consideration of SB 1002.
Edgmon said, “Today’s [Wednesday] vote in the Senate perfectly illustrates why an operating budget has not yet been enacted: debate over the amount of this year’s Permanent Fund Dividend is consuming the Legislature. This is why we believe the Legislature should first pass a responsible budget to provide students, elders, and business leaders certainty in the critical services they rely on. Then we can focus on the many important questions surrounding the future of the Permanent Fund.”
The Alaska Permanent Fund was established - by constitutional amendment- to give future generations of Alaskans the opportunity to share in Alaska's rich energy and mineral resources. The fund was established in Alaska in 1976 by Article 9, Section 15 of the Alaska State Constitution under Governor Jay Hammond.
Alaska’s Constitution does not allow for dedicated funds, so in order to direct these oil and minerals revenues into a permanent fund, the Constitution had to be amended. Placing the founding language for the fund in the Constitution had the added benefit of helping protect it from being spent by the Legislature without a vote of the people. A Constitutional Amendment requires a majority vote of the people of Alaska, and the item was put on the 1976 statewide general election ballot. By a margin of 75,588 t o 38,518, a Constitutional Amendment establishing the Permanent Fund was approved.
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