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Monday, January 27, 2020
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Go big money: Permanent Fund dividend formula restored

FORTY DIFFERENT REASONS FOR VOTING IT UP OR DOWN

The Alaska House on Monday voted to fund this year’s Alaska Permanent Fund dividend at $2,700.

If it stands — and that’s a big if — that’s what qualifying Alaskans would get in October. The deadline to apply for this year’s Permanent Fund is March 31.

The move to restore the formula-based approach to the dividend came through an amendment to an amendment to the operating budget on Monday.

After several other amendments to the amendment, a version was approved 21 to 19 that adds between $450 million and $900 million (depending on how one calculates it) to a budget that already has a $2.6 billion gap, digging a hole that is more than $3 billion deep.

The budget patch would come from two places: the $2 billion that will be left in the Constitutional Budget Reserve and then some portion of the Permanent Fund’s $17 billion Earnings Reserve Fund, which is what is available for spending.

But the operating budget as a whole itself must pass, and getting the 21 votes to pass a budget that has bulked up with everything from a $500,000 Vitamin D study to unlimited authority for the Alaska Gasline Development Corporation to go it alone with third-party money, may prove difficult. It takes a simple majority vote to get into that Earnings Reserve Account, something that also has election-year ramifications.

With 19 days left in regular session, the House majority appears to be fracturing, still unable to pass an operating budget, and having its liberal members vote all over the map on the question of how much to fund the dividend shows that it’s not a binding caucus.

The disarray in the House under Speaker Bryce Edgmon leaves the Senate little time to process the operating budget through the required committees, vote on it, and then negotiate a settlement with the House through conference committee.

ELECTION YEAR NOISE-TO-SIGNAL RATIO

Politicizing the dividend for the first time in history, in 2016 Gov. Walker used his veto pen to set Alaskans’ portion of oil royalties at what he thought would be a tolerable amount. The $666.4 million he vetoed from their dividends stayed in the Permanent Fund’s Earnings Reserve Account and earned interest.

“If we don’t make a change in the dividend program, it goes away in four years,” Walker said two years ago.

But in 2018, the governor could be forced into vetoing half of the dividend once again, if the Senate goes along with the House’s decision to fully fund it.

And because it’s an election year, Walker could be forced into a corner by his opponents.

Many Democrats want to see Mark Begich run for governor, and the Permanent Fund dividend is a way of putting the “independent” Walker in a box: If he vetoes the dividend again, he may find no way to climb out of his political malaise. Walker won by joining with the Alaska Democratic Party to create a hybrid independent-Democrat ticket that won against incumbent Sean Parnell, a Republican.

Recent polling by Dittman Research shows that Walker’s popularity with voters has taken a dive, with only 41 percent prepared to vote for him again this year. Another poll by Morning Consult shows him as the least popular governor in the nation.

WHERE DID THE YES VOTES COME FROM?

If the dividend amount stands at $2,700, it would be the largest awarded in the Permanent Fund’s history, although not when inflation is calculated.

The yes votes on $2,700 dividend went across caucus lines: Speaker Bryce Edgmon, Neal Foster, Scott Kawasaki, Gabrielle LeDoux, John Lincoln, Justin Parish, Ivy Spohnholz, Geran Tarr, Chris Tuck, and Tiffany Zulkosky in the liberal majority and David Eastman, DeLena Johnson, Charisse Millett, Mark Neuman, George Rauscher, Lora Reinbold, Dan Saddler, Colleen Sullivan-Leonard, Dave Talerico, Cathy Tilton, and Tammie Wilson in the conservative minority.

All House members are up for re-election along with the governor. Ten of the 20 Senate members face re-election in 2018.

[Related news: Senate Democrats walk out rather than vote on spending cap]

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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

  • The Sheldon-Wright (Men in Red) 81% fully funded 9% competitive funded budgets only cuts 10% across the board on departmental budgets. Fully funding other non-essential government and adding 10% budgeted back into the CBR to refill it. What a competitive budget does is it forces departments to cut un-needed items so that they can retain vital parts of their budget to avoid the VETO pen which the Governor will use to reduce and take out a lot of travel and other questionable expenditures. The Sheldon-Wright plan will refill the CBR and bring spending under control competitively.
    We will restore the PFD dividend and ensure the Hammond 50-50 plan goes forward working for efficient government and streamlining its processes. We will require contracts that follow a 10% contracted savings for goods and services similar to a military discount. All agencies will have to be capped at the salary level 149,999 or lower on all department staff members.

  • It is a lot of fun to vote to to give people money without worrying too much about the funding source.

  • Hear them cry next to tax the income of working Alaskans to keep paying those PFDs to everyone else.

    When did the PFD become a welfare entitlement??? The legislature seems to have seriously lost any factual and historical perspective it ever had on this one.

  • Finally the House Majority is having to step out from behind false choices they and Walker have used, with the complicity of much of Alaska media, since its creation. This Majority is not a bi-partisan coalition but a bastardization of ideologues and weak leadership; exactly corresponding to its identical twin in the executive at the hands of which Alaskans have suffered since the 2014 election. Walker and the House Majority continue to increase the operating budget while most Alaskans want to see a reduced operating budget. Working families especially want to see reduced state spending on operations. The operating budget is actually increasing year over year. But the dire need at this point is leadership; it’s not to be found in Juneau at this time. We have an outsider running the governor’s office and the governor, the alt-left running the Lt. Gov. (as if that matters), the Rules Chair running the House Majority, and Bernie Sanders running House Finance.

  • Remember, this is a Democrat-controlled House who sees productive Alaskans as patsies, marks, targets for every revenue-generating scam that comes down the pike.

    What changed?

    Are we so gullible as to believe this group is giving away something to productive Alaskans that they do not expect to recover, with interest?

  • Buying votes?

  • This has now turned the House Majority into a circus. Someone suggested bringing Westlake and Fansler back to mediate between the two factions within the Majority. Representative Kito, a registered engineer, said in the newspaper he voted against it because of calculus. His Juneau colleague, a crossing guard, doesn’t understand calculus but he went to college in France so voted for it. The budget process has come to a screeching halt. The hat from Homer is said to have pledged to the 3rd Floor it won’t come to them for approval or veto, but his co-chair voted for it. The Speaker voted for it and then went back to practicing for his Folk Festival set. No one knows how to now take this back this year; everyone wants the other guy to do the deed.

  • your time has expired why can’t we all work together, we need our LNG and lets go back to our Knik-Arm -Crossing we have had all the studies its time to move forward
    on our Federally funded project. there is no reason that this bridge should not be built
    remove are Environmentalist there the reason we are at this point this Bill was passed
    Thanks to Rep: Don Young but we need a real Gov to make it happen, House members are up for re-election with Gov Walker and ten of the 20 senate members face re-election in 2018. do you want to see are Bridge and LNG projects become a reality our
    State needs this join me Vote for (MIKE-DUNLEAVY) as your Governor for our great
    State of Alaska thank you
    Larry Zenor.

  • This would be a good article, if it didn’t make this statement, “But in 2018, the governor could be forced into vetoing half of the dividend once again, if the Senate goes along with the House’s decision to fully fund it.” Because it already correctly quotes the amount in the ERA at 17 Billion. That the Budget has been jacked up 1 Billion more from the original 10.2 Billion governor’s proposed is a crime. Using half the annual Earnings (1.7 Billion), the original deficit would have been about 600,000 million, but with that 1 Billion increase, we’re looking at 1.6 B more from the ERA, and that’s another 5 Billion dollar draw this year. (2 billion of that 5 B went back into the Corpus last year.) The Fund can sustain about 3.9 Billion in draws per year, if the 65 Billion total is not drawn down. So, no, the Governor is in no way compelled to veto the Dividend, if the Senate follows suit with the House. He can easily make cuts to the Budget elsewhere, as everyone outside gov’t has been saying for years…

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