The Senate is expected to vote on a bill that would approve a $1,600 Permanent Fund dividend this fall — the same amount as last year.

Lawmakers are approaching their third week of a special and have struggled to agree on the size of a PFD. 

Gov. Mike Dunleavy has been pushing for dividend that falls within statutory formula, established in 1982, but ignored each of the last three years. That payout would be around $3,000. He calls the Senate’s plan a “non-starter.”

Under Senate Bill 1002, Senate Finance Committee co-chair Bert Stedman, R-Sitka, told the Senate Rules Committee on Monday that the bill would draw from the following funds to cover the payout:

  • $770 million from the general fund, revenue generated largely from oil taxes;
  • $172 million from a savings account that would be depleted with this draw;
  • $128 million from the Alaska Higher Education Investment Fund.

“It’s a significant decision that face[s] the Legislature,” Stedman said. “How to finance our current obligations and not devour the seed capital that really should be left for future generations of Alaskans.”

In its operating budget, the Senate approved a $3,000 dividend, but did so knowing the number could go down during negotiations with the House.

Neither the House nor the governor put any dividend appropriations in the budget. House leaders knew an amount would be agreed upon after the Senate completed its work on the budget and Dunleavy has long said he considered the dividend to be a transfer from the Permanent Fund’s earnings, not an appropriation.

But on special session proclamation, the governor called for the budget to include a dividend.

Even $1,600 is considered high by some lawmakers, but it may be the least contentious path toward adjournment; the special session can go no longer than June 14.

“Right now we are contemplating a $1,600 dividend. Why? Because it’s a negotiated amount,” said Senate Finance Committee co-chair Natasha von Imhof, R-Anchorage. “We can’t afford it. We’re draining savings accounts. I don’t know what we’re going to do next year. We can afford about a $1,000 dividend with a skinny capital budget.”

Members of the Democratic-led Senate minority did not approve of using the Higher Education Investment Fund to pay for a dividend. Stedman told the Rules Committee the fund would still have about $212 million remaining after the $128 million draw.

“Using the Higher Education Fund to pay a Permanent Fund dividend doesn’t make sense,” said Sen. Jesse Kiehl, D-Juneau. “Raising more barriers to paying for college hurts the economy and limits opportunity. Our state needs a real plan that pays a sustainable dividend Alaskans can count on for the long-term. This falls short.”

House Speaker Bryce Edgmon, I-Dillingham, cautioned against approving a $3,000 dividend as a dangerous precedent.

“If the Legislature funds a $3,000 Permanent Fund dividend this year, we’re going to do it next year during an election year,” he said. “I’ve been in this process long enough to know election year politics put a tremendous amount of pressure on legislators to do things that they might not do in a non-election cycle.

"I think it’s the prudent thing to do this year is to provide a healthy $1,600 Permanent Fund dividend, something that I support, something that I work very hard with my constituents to help them better understand the trade-offs that are involved. The fact is, we’re now in an era if you pay a bigger Permanent Fund dividend, expect to see big cuts in essential services. There is just no other way around it."

The floor session for the bill is scheduled to begin at 9 a.m. Tuesday.

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