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Monday, December 17, 2018
HomePolitics and PolicyShould the PFD be enshrined in Alaska’s Constitution?

Should the PFD be enshrined in Alaska’s Constitution?

HOUSE DEMS SAY YES, GOVERNOR SAYS MAYBE, SENATE GOP SAYS ‘SLOW DOWN’

The Alaska House Democrat-led majority is looking at enshrining the Permanent Fund Dividend into the Alaska Constitution.

But not a full dividend, just some portion of what it might have been under the original formula.

Public testimony will be taken on HJR 23 at 1:30 pm on Monday, March 12, and again on Tuesday. 

[Read details of HJR 23 here.]

Paul Seaton, co-chair of House Finance, is likely to reveal more details of the plan this week. HJR 23 is sponsored by Rep. Chris Tuck, Gabrielle LeDoux, Bryce Edgmon, Paul Seaton, Neal Foster, Scott Kawasaki, Jonathan Kreiss-Tomkins, Harriet Drummond, Ivy Spohnholz, Justin Parish, Geran Tarr and Andy Josephson, all Democrats.

Democrats face an uphill climb, as they’ll have to have two-thirds of the House and Senate approve the proposed constitutional amendment. Then it would go to the voters. 

But the mood of the Republican-led Senate is to not create a constitutionally protected payment until there’s a solid fiscal plan for the state.

The Senate majority has so-far declined to advance a bill by Sen. Bill Wielechowski, an Anchorage Democrat. Wielechowski has asked the Senate to bypass the Senate Judiciary Committee, which is holding his PFD Constitution bill. 

The Permanent Fund is currently in statute, and is not constitutionally guaranteed. The constitutional language dating from 1976 that established the Permanent Fund calls for all realized cash earnings to be deposited in the state’s General Fund.  Later, in the early 1980s, the Alaska Legislature created the dividend program in statute.

Now, for the first time, the Walker Administration is also thinking about the idea of putting the PFD in the Constitution. Lt. Gov. Byron Mallott signaled that the Administration is open to discussing it during an interview on APRN’s Talk of Alaska on March 2:

“The Dividend absolutely needs to be a key aspect of the Alaska economy into the future. And that was the reason that the governor made his veto. It was to protect the dividend going forward and to remove it hopefully from legislative table such that they would then act to protect the dividend. And whether or not it should be placed into the constitution is a valid policy debate — very much so,” Mallott told the host of Talk of Alaska.

The Alaska Republican Party State Convention delegates debated a similar measure over the weekend, but in a close vote ultimately rejected adding it to the party platform.

It may turn out that the most vigorous policy debate centers not on whether the dividend should be constitutionally protected, but rather, at what level?

Should it be set near Gov. Bill Walker’s politically set level of approximately $1,200, or should the formula the legislature adopted in the early 1980s be retained?

The so-called “original formula” would yield dividends for Alaskans above $2,500 initially.

The language of HJR 23 would have 33 percent of the income of the fund available for distribution as dividends to residents, as provided by law. The remaining income would be deposited in the general fund and the distribution of dividends would bypass the legislative appropriation or gubernatorial veto process.

Gov. Walker famously vetoed the dividend in 2016, and the Legislature did not fully fund it in 2017. The amount that would be guaranteed by the Alaska Constitution would be not less than $1,250 each year.

HJR 23 contains a provision to recalculate how money is used from the Permanent Fund Earnings Reserve Account, and adds a “Percent of Market Value” provision that would tap the fund in the same way and at a level similar to that of other large foundations such as large university endowments and sovereign wealth funds.

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Suzanne Downing had careers in business and journalism before serving as the Director of Faith and Community-based Initiatives for Florida Gov. Jeb Bush and returning to Alaska to serve as speechwriter for Gov. Sean Parnell. Born on the Oregon coast, she moved to Alaska in 1969.

Latest comments

  • Screw those thieves!

  • Byron, please! Is there anyone who believes that Walker’s PFD veto could protect the PFD or could possibly have been intended to do so? Who would believe any politician who comes right out and says, “I’m screwing you for your own good?” I guess the bad news continues to be that Walker is a crook. But the good news is that he is a stupid one. As so many in Juneau say, Byron has not been smart at all during the past 4 years.

  • Oh please, don’t tell me the R’s are falling for this madness!

  • Suzanne, are you censoring my previous comment? Chris

      • I guess I lost it myself. It was genius…oh well

  • I offer a free symposium to explain to every thinking human-being how enshrining the dividend is a really really bad idea.
    Call me to reserve space….Chris

  • I don’t have much time left to gather signatures for my Independent (non-party-alffiliated) run for Governor. My strategy is, as a 3rd party candidate, to split the electorate so that all the sane people vote for me and all the ideological nutcases split the other 65% of the vote.

  • Enshrining the Dividend just creates another Government “obligation”, making Government bigger than ever. This is not following the idea of a government limited to only what is/was necessary.
    Lets end the Dividend as we know it now. Lets balance the books. We need to re-think how we provide the benefits of our Permanent Fund. We must do it smarter.

  • I guess I will conclude by saying that it is not even possible to enshrine the dividend. So why is this even a question? It is an absurdity and a distraction.

  • Since I know enshrining the dividend cannot happen, I am more concerned about booting the traitorous 3 and Walker. 3 years of failure is enough!

    • And no I am not forgetting about you Jason Grenn! Independent? HAH! Fool me once, shame on You.