Permanent Fund plan provides no dividend guarantees
Lawmakers have approved a $1,600 dividend this fall, but there's no guarantee you will get a PFD that size next year.
The plan approved by the Legislature this year means lawmakers will have to agree on a yearly basis what the dividend amount should be. Senate Bill 26 sets a limit on how much the Legislature can draw from the Permanent Fund's earnings, but it's up to lawmakers to decide how much of that money goes towards government -- and what goes towards dividends.
The subject has plagued the Alaska Legislature for the last several years.
Gov. Bill Walker's plan to use the Permanent Fund's earnings originally included a minimum dividend guarantee, but the measure lawmakers approved this year took that part out.
“In order of priority, they had to make this step first,” Walker said in an interview Tuesday.
Walker says he supports what the Legislature did pass -- praising their decision to use the Permanent Fund as a sort of endowment. While there aren’t any guarantees on the dividend, Walker says he still believes SB26 protects the dividend program.
“There’ll be public process, public input on how that is set,” Walker said. “Initially, that was set in the bill, it was different percentages. It's a matter of compromise.”
That compromise has taken the Alaska House and Senate three years to reach.
“Make no bones about it, I think the public expects a healthy dividend, and I think the pressure is going to be on for the Legislature to come up with some kind of an overall solution that enables the dividend to continue forward,” said House Speaker Bryce Edgmon. “I think you sort of have to step back and look at the bigger picture, first off, is we have to preserve the fund itself.”
While there's no minimum, there's also no maximum dividend guarantee – meaning Alaskans could get the full PFD amount, according to the current formula, something that hasn’t happened since 2015.
“It allows a future Legislature to take up that conversation, we all hope, in better times,” Sen. MacKinnon, co-chair of the Senate Finance committee, said of the legislation that passed.
It’s a conversation Walker hopes a new legislature will take up again next year. As for this year, he says that conversation has come to a close.
As for Alaskans, Walker said, “I think that they can rest assured that there will be a dividend. I really do.”
While Walker says there's no plan to call any special sessions on budget issues this year, he says work on a fiscal plan isn't over yet.
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