Division widens between Alaska House, Senate on reducing 2017 PFD checks
Will lawmakers cap the Permanent Fund Dividend this year, as they look for a way to pay for the state’s multi-billion dollar budget gap? It’s one of the biggest questions facing lawmakers this session. They came close to doing it last year.
Gov. Bill Walker’s plan to reduce dividend checks to $1,000 in the near future died last year in the House Finance Committee, just one vote shy of moving out to the House floor for a vote by all House members.
Rep. David Guttenberg, D-Fairbanks, was one of the no votes that stopped the bill in its tracks.
“My vote on the permanent fund last year was hard, and I’ve re-examined it many times and I still believe I did the right thing and I still want to do that,” Guttenberg said, adding that getting Walker’s bill past the committee hurdle this year will take more than a dividend-only solution.
Guttenberg said he wants to see changes to oil tax credits and a broad-based tax first — what he calls a comprehensive plan.
The Senate passed Walker’s plan last year with a vote of 14 to five. Sen. Cathy Giessel, R-Anchorage, voted for it and said she would likely support it again. The Anchorage senator believes reducing the dividend would reduce pressure on the budget.
“The dividend draws people to our state who utilize a high amount of state services and so if that dividend were not being offered, those government-dependent individuals would not move here,” Giessel said.
“I don’t think that that’s an equation we can do,” Guttenberg said. “That we can cut people off from a permanent fund and assume that fewer people will come here because of that. I don’t think you could make that assumption or I wouldn’t want to build policy on that.”
House leadership is pushing for a comprehensive plan. Only then, they say, would they put a dividend cap on the table.
“That’s one of the last things that we want to do,” House Majority Leader Chris Tuck, D-Anchorage, said in an interview last week.
With the Senate reluctant to take up taxes or oil credits, the split that surfaced between the House and Senate at the end of last year’s session might just be even wider at the start of this one.
Walker’s House Bill 61, which sets PFD checks at $1,000 for the next three years, is scheduled for a first hearing in the House Finance Committee next Thursday.
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