The Senate and House Conference Committee today is considering a new version of Senate Bill 26 that is a potential compromise to resolving the state’s fiscal problems.
The draft is the result of ongoing negotiations between the House and the Senate to bridge differences in their versions of SB 26, which creates an endowment model for the Permanent Fund, and a structured draw that will cover 80 percent of the State’s current deficit.
The draft limits the amount of money the Legislature may withdraw from the Permanent Fund’s Earnings Reserve Account each year.
“The structured draw in the bill will support the Alaska Permanent Fund Corporation in making prudent investment decisions, providing the necessary tools to maintain a healthy fund and dividend program. The draft does not address how the money will be spent and does not change existing law governing the dividend,” according to a statement from the Senate Majority Press Office.
The conference committee draft:
- Limits, for three years, an annual draw the Permanent Fund Corporation has testified is sustainable – 5.25 percent (effective rate of 4.35 percent in 2019) of the five-year rolling average of Permanent Fund’s value. After three years, the draw decreases to 5 percent;
- Removes the statutory split and annual dividend amount in previous versions of SB 26;
- Maintains the statutory dividend calculation in existing law;
- Conforms statute to a recent Alaska Supreme Court decision.
“Transitioning to a structured, rules-based withdrawal mechanism to allow some Permanent Fund earnings to help support state government and essential services is widely acknowledged to be the single most important action we can take to resolve our state fiscal problems,” said Sen. Anna MacKinnon. “This action alone will solve more than 80 percent of our deficit.”
Rep. Neal Foster commented, “This work draft does not change, in any way, the existing law governing the Permanent Fund dividend. The bill focuses instead on one key change: using an endowment model to protect the Permanent Fund and future dividends.”
Institute and raise taxes and raid the fund. Thats all they got?
Sorry, but this is bi-partisan dishonesty. I guess it’s the best we can do given the people we have however.
Perhaps it would be fairer for me to say that given the lack of leadership, and the wholesale dishonesty coming from the Governor and Lt. Governor this is the best that can be done by 60 diverse Legislators.
First, AS 37.13.14 states “… distribution equals 21 percent of the NET INCOME of the fund for the last five fiscal years, including the fiscal year just ended.” The only averaging occurs in the inflation proofing.
The SB 26 (or whatever) now states MAY distribute … Section 37.13.145 (Disposition of income) states “…the corporation SHALL transfer from the earnings reserve account to the dividend fund established under AS 43.23.045, 50 percent of the income available for distribution under AS 37.13.140.”
So, they aren’t going to change existing statute, they’re just going to Not Withstanding and ignore existing law. Alaskans have GOT to have this NOT WITHSTANDING clause removed from statute. It is being used by the Legislature, our Assemblies and our City Councils to abrogate existing codes, statutes … LAWS.
p.s. – there’s no fiscal crisis – there’s a SPENDING crisis in Alaska’s government.
The Legislature (this one in particular) is no closer to “Solving the Budget Gap” than they were when they gaveled in the first day back in January 2017. All they’ve done is taken money from Alaskans, without giving Alaskans the opportunity to vote on whether or not they wanted to give it, to continue to pay for a budget that remains, at its base, unsustainable.
When an article comes out that describes how the Legislature and GOV have made real, sustainable, and measurable cuts to the Operating Budget (and I’m talking about ALL pots of money, not just the Unrestricted General Fund), then we will be moving in the right direction.
It stands today, exactly as it did in 2016 when the GOV unilaterally withheld 1/2 of every Alaskan’s Dividend, and as Beth Fread correctly pointed out, the State has a spending crisis, not a revenue crisis.
This legislature has made a mockery of representative government. We are overlorded by a select few, and it is apparent this select few serve a select few. We have a systemic flaw in Juneau and unless this is addressed, we will have business as usual which means more government and less PFD.
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