Gov. Mike Dunleavy on Thursday added proposed permanent fund dividends of $2,350 to the agenda for the legislative special session.
Without the move, it was possible Alaskans wouldn’t receive PFDs this fall for the first time in 40 years.
The change to the agenda also would allow funding for $18 million in scholarships and need-based grants to pay for students to attend college, as well as $3.3 million for the state’s medical education program, known as WWAMI.
Dunleavy is proposing to pay for this year’s PFDs and the other programs by drawing $1.53 billion from the permanent fund’s earnings reserve account.
His proposed bill would also transfer $1.47 billion from the earnings reserve to a separate savings account, the Constitutional Budget Reserve, or CBR. This amount could be used for the budget in future years.
Dunleavy said in a statement that he may add funding for more programs to the special session agenda, as his administration works with the Legislature. When both chambers failed to get enough votes to draw from the CBR, the programs left unfunded included oil and gas tax credits, as well as some of the funding for 16 other programs.
“Alaskans are still in recovery mode from the economic impacts of the pandemic,” Dunleavy said in the statement. “With this in mind, and following recent encouraging conversations with legislators, my administration has put forth a vehicle for the legislature to fund the PFD and student scholarships — two critical programs that directly impact Alaskans.”
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The additions to the agenda by the governor, a Republican, drew immediate praise from legislative leaders across caucus lines.
Dunleavy originally left the appropriation bill — which includes the funding for the PFDs — off of the agenda for the third special session that started on Monday. He wanted the Legislature to focus on his proposals to amend the state constitution to include PFDs and to reduce the state limit on spending for government services.
But legislators, including House Speaker Louise Stutes, a Kodiak Republican, said an appropriations bill for dividends and other programs was needed.
After months of back-and-forth earlier this year, the House and Senate passed a state budget that would have set PFDs at $1,100, but a failed vote to draw money from the CBR shrunk the amount to $525.
And Dunleavy vetoed that remaining amount in July, saying Alaskans would regard it as a “joke.”
But most members of the both chambers have been opposed to drawing more from permanent fund earnings than a 2018 law would allow. Dunleavy is now proposing drawing $3 billion more than that law says.
The House and Senate are scheduled to hold floor sessions on Friday, when Dunleavy’s newly proposed bill could be introduced.
Andrew Kitchenman is the state government and politics reporter for Alaska Public Media and KTOO in Juneau. Reach him at akitchenman@alaskapublic.org.
