Senate panel approves $3,000 PFD during budget amendment talks
The Senate Finance Committee on Friday unanimously approved to appropriate $1.9 billion for a Permanent Fund dividends, which aligns with Gov. Mike Dunleavy’s proposal to follow the statutory formula and pay about $3,000 to eligible Alaskans.
However, this is hardly the final word.
Even if the full Senate backs the amount when it votes on the operating budget next week, the House and Senate must still have to negotiate differences with a committee made up of three members from each chamber.
Knowing the Senate still had to review its budget proposal and a separate bill on the dividends remained active, the House did not appropriate any money for the dividend when it sent the budget to the Senate earlier this month.
Senate Finance co-chair Bert Stedman, R-Sitka, proposed an amendment, acknowledging the final amount could differ significantly.
The committee’s other co-chair Natasha von Imhof, R-Anchorage, opposed the sum, but added, “The co-chairs can continue to negotiate with the House and discuss the amount of the dividend over the next three weeks, so I reluctantly support this.”
Before offering that closing remark, von Imhof reiterated her longstanding position on determining a final amount.
“As I have stated all along, paying out a $3,000 dividend will put financial pressure on the state. With a $700 million surplus that we have now with our budget, it requires about another $1.2 billion draw — from somewhere,” she said. “I feel that the state should live within its means and pay a dividend that we can afford as well as provide a reasonable level of state services.”
Each of the last three years, Gov. Bill Walker and the Legislature approved dividends lower than the statutory amount.
Shortly after taking office, Gov. Dunleavy introduced legislation that would back pay each of those three years, but the bills have gained no traction.
Still, in a prepared statement, Dunleavy hailed the news.
“I want to thank the Senate Finance Committee for putting a $3,000 PFD in the budget — in line with with the decades old statutory formula,” he said. “I hope the full Senate concurs with this action and the House follows suit to provide a full PFD to Alaskans.”
House Speaker Bryce Edgmon, I-Dillingham, said his caucus will meet to discuss the changes proposed so far.
“We’ll also be doing our best to wrap our heads around something that’s very enormous and very sudden,” he said, “and may have implications on schools and public safety and other vital services potentially if the governor takes out his veto pen.”
The Senate’s Finance Committee also agreed to shift $12 billion from the fund’s earnings reserve — the source of dividend payments — to the fund's principle, which means that money could not longer be accessed for dividends for to pay for government services according to the state constitution.
Stedman’s amendment initially called for moving $14 billion, but the committee agreed to a lower amount. Several members were concerned $14 billion would not leave enough in the earnings for future appropriations to cover dividends and government services.
The fund’s earnings reserve account stands at just over $18 billion, according to the Permanent Fund Corp.’s website.
These changes were among about 12 dozen amendments to the draft budget that will get a vote as early as Wednesday.
The total budget, including federal funds and the proposed PFD amount, stands at $11.5 billion — $735 million more than Dunleavy proposed.
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