A state Senate panel on Tuesday night spent more than two hours listening to Alaskans wishing to comment on Gov. Mike Dunleavy’s proposal to back-pay reduced Permanent Fund dividend payouts from each of the last three years.

It was the Senate State Affairs Committee's second, two-hour public comment period on Senate Bills 23 and 24, which also call for paying a full dividend under the statutory formula.

Former Gov. Bill Walker reduced the 2016 payout with a veto; each of the next two years the Legislature reduced the sum from the statutory formula.

Nearly 140 people weighed in with slightly more than half against the bills, according to several lawmakers’ estimates. Not everyone who testified clearly stated a position on the bills, just the dividends themselves and the budget.

Those for the bills say the dividend belongs to the people and should not be given to a state government with a history of poor spending choices. They add the money is a statewide boost to an economy struggling to emerge from a years-long recession.

“It’s not government money,” said Heather Hepler of Chugiak. “The budget needs to be cut. Schools can cut administrative costs. Those who want to donate their PFD should be able to do so to government or schools. If you take the PFD, government will just spend it and then impose a tax later.”

Those against the bills say the state cannot afford $1.9 billion for a dividend when it’s facing a $1.6 billion deficit. They also say with oil revenue no longer able to support the state’s basic services, it’s time to view the dividend differently.

One Juneau resident spoke against the bills and devoted most of her time suggesting another path forward.

“Given the state's financial situation, paying a full dividend per the formula codified in 1982 is no longer in the best interest of Alaska,” said Brandee Gerke. “As oil revenue has declined, Alaska needs a new formula for paying for state services.

“It is time to update the proportion of the fund's earnings paid in dividends. With a well-developed and updated plan, we can ensure the sustainability of the fund for dividends and to pay for state services.”

Dunleavy’s bills propose a staggered payment plan as a way to restore funds not paid under the statutory formula.

Dunleavy rolled out the plan for back pay in January by introducing bills that propose paying back more than $3,600.

His plan calls for the following payment schedule:

• $1,061 from 2016 to be paid this year to all who received a dividend three years ago and remain eligible this year.
• $1,289 from 2017 to those who received a dividend two years ago and will be eligible in 2020.
• $1,328 from 2018 to Alaskans who received a dividend last year and will be eligible in 2021.

Committee Chair Sen. Mike Shower, R-Wasilla, limited each person to one minute while spending two hours, 15 minutes on Tuesday’s hearing.

Calls came from as far as Utqiagvik and as nearby as Sitka. Some called from the Matanuska Susitna Borough communities of Wasilla, Sutton, Talkeetna and Palmer. Others called from Healy, Kenai, Cordova, Homer and Ketchikan, among others statewide.

Both bills have two committee referrals. Should they pass out of State Affairs, the next step would be on to the Senate Finance Committee for additional review.

House Bills 46 and 47 — the companion bills to SB 23 and 24 — must get through the same committees on the House side, plus the House Judiciary Committee.

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