A bill offered by House Ways and Means Chair Rep. Ben Carpenter of North Kenai, requiring the state to pay an annual Permanent Fund dividend based on a statutory formula — not based on each year’s legislative whim — was discussed and analyzed in the House Judiciary Committee on Wednesday. It will be the topic of public testimony on Friday.
Carpenter, speaking to the committee to advocate for HJR 7, said that for almost 30 years Alaskans could count on their annual dividend checks to come as the state legislature followed the law that created the statutory formula.
In 2016, Gov. Bill Walker broke trust with the people of Alaska when he vetoed a large portion of the dividend. Subsequent to his veto, a court case was filed and the Alaska Supreme Court decided that the dividend was merely an appropriation like any other.
That set up a contradiction, since there is an existing statute that provides a formula for how the dividend, which represents a portion of the wealth that originally came from Alaska oil royalties, will be arrived at each year.
Although the Legislature could have chosen to return to the statutory dividend calculation, each year since Walker halved the dividend, the Legislature has been caught up in ongoing battles over how much it will give to the people, and how much it will give to government.
In essence, what used to be an amount that was calculated and not fought over is now a yearly battle.
The bill would not set the amount in stone in the Alaska Constitution. It would only require the Legislature to follow statute. That’s because the Alaska Supreme Court said the payment was statutorily defined and the Legislature can change the statute and change the formula, but must then stick to the formula.
Neglecting to constitutionalize the PFD would allow lawmakers the ability to shirk their obligation to address the shortcomings of Alaska’s fiscal and economic planning, he said. That has how it’s been done for the past eight years, since Gov. Walker made the decision to veto half of Alaskans’ counted-on dividend.
Being sensitive to the occasional vagaries of the investment portfolio of the Alaska Permanent Fund or inflationary pressures, HJR 7 would not allow the Legislature to ever dip into the corpus of the fund. That is protected by the Alaska Constitution.
Amendments to the bill from committee members were due at 5 pm Thursday. Public testimony will be taken on HJR 7 when the committee meets again on Friday at 1 pm.
Wednesday’s committee discussion can be watched at this link.
