At a press conference in Juneau today, Gov. Bill Walker said he understands the position of legislators who are hearing from constituents opposed to cuts to Permanent Fund dividends.
“I share with them the struggle they found themselves in. I found myself in exactly the same struggle,” Walker said. “And when I looked at the options available to us, there were no other options.”
No options, he noted, other than legislation that would draw roughly $2 billion annually from Permanent Fund earnings to pay for the state government budget. This would close most of the state budget deficit, which is more than $3 billion.
Walker has been talking with House members over Senate Bill 128, that would use a portion of Permanent Fund earnings, in looking for a compromise that would meet his goal of providing a sustainable source of state funding.
But many Alaskans aren’t happy with the concept. House Finance Committee members heard an earful from residents who don’t want cuts during public testimony Tuesday.
Metlakatla resident Brittany Christiansen said she doesn’t understand why she’s facing a potential $1,000 dividend cut.
“I do not want it to be taken away,” Christiansen of half of the $2,000-per-person dividend. “I was wondering why are they cutting people’s PFDs?”
Walker predicted lawmakers will feel even more heat from constituents if they don’t act. That’s because continued deficits would exhaust state savings and end dividends.
“[If] we don’t make any changes associated with the Permanent Fund, you know, the heartfelt comments on a reduction will be even more heartfelt and challenging if it goes to zero. And that’s what we’re trying prevent from happening,” Walker said.
A combination of minority-caucus Democrats and conservative Republicans have expressed the deepest reservations over the bill. One Democrat – Anchorage Representative Les Gara – said he’d like to see a bill, perhaps with a smaller dividend reduction this year. He would have preferred that the state first cut oil and gas tax credits deeper.
“I see a devastating dividend cut and a devastating, bad plan coming out if there is no compromise,” Gara said.
The House Finance Committee may vote as soon as Thursday after members spent Wednesday huddled in small groups and one-on-one meetings discussing the bill. The Legislature’s special session is scheduled to end Tuesday, but Walker suggested he would soon call them back if they don’t pass the bill.
Andrew Kitchenman is the state government and politics reporter for Alaska Public Media and KTOO in Juneau. Reach him at akitchenman@alaskapublic.org.
