The state Senate could be voting as soon as next week on legislation aimed at rewriting the formula that sets the amounts of permanent fund dividends.
A key legislative committee considered two bills on Monday that would set PFDs at a lower level than the roughly $2,500 Gov. Mike Dunleavy proposed, unless there are new taxes. His proposal is based on setting dividends at half of the annual amount the Legislature draws from the permanent fund.
But at least some members of the Senate Finance Committee are concerned that it wouldn’t be sustainable.
Sitka Republican Sen. Bert Stedman said it doesn’t add up.
“There’s only so much money,” he said. “And we don’t have a printing press like they do in Washington, D.C.”
Instead, the committee considered Senate Bill 200, which would set the dividend at one quarter of the annual draw, or roughly $1,250. It’s similar to a bill the Senate passed in 2017. The House had passed a different version of the bill, which would set dividends at one third of the draw, and the two chambers couldn’t agree on a compromise.
Another measure, Senate Bill 199, would set dividends at the level proposed by Dunleavy, beginning in the fall of 2024. But under the bill, that would only happen if there were new laws that raised taxes and fees by $700 million. It’s similar to a bill the Senate briefly considered in September.
The rising price of oil has increased state revenue forecasts since Dunleavy made his latest PFD proposal last spring. But the governor’s proposal would lead the state to spend more than it brings in, if it doesn’t make other policy changes, according to a nonpartisan analysis. And that gap would grow if inflation drives up state spending or if the capital budget increases to pay for maintenance that’s been put off.
Anchorage Republican Sen. Natasha von Imhof said the Legislature shouldn’t count on high oil prices. She recently announced that she isn’t running for re-election.
“Just like you don’t build a church for attendance on Christmas and Easter, you don’t pass a dividend bill based on $90 [per barrel] in oil,” she said. “We need to find something that’s sustainable and affordable over time.”
Some Alaskans who called in to testify against the bill say they support larger dividends.
“We’ve been calling and calling and calling for the past how many years now? Do you guys listen? Or do you guys have cotton swabs in your ears?” asked Magnus Sampson who called in from Dillingham.
The Senate Finance Committee is aiming to pass one or both bills this week, setting up debate by the entire Senate next week.