OMG: Bait-and-switch House Finance PFD bill hearing Thursday - Must Read Alaska
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Friday, August 23, 2019
HomePoliticsOMG: Bait-and-switch House Finance PFD bill hearing Thursday

OMG: Bait-and-switch House Finance PFD bill hearing Thursday

House Finance Committee has introduced a bill that would give Alaskans their full $3,000 Permanent Fund dividend this year — but there are a few hitches.

The bill changes the formula going forward and would cut future dividends in half.

HB 1005 would pay some of the dividend out of the Constitutional Budget Reserve fund this year, which means it’s no longer a dividend from the Permanent Fund at all, but is simply a cash payment to Alaskans.

Paying the dividend from the CBR would set a precedent that would change the contract Alaskans have with their government — that their portion of the resource wealth of the state comes in the form of an annual dividend off of the Permanent Fund earnings.

House Bill 1005 will be heard at 9 am on Thursday in House Finance Committee. The committee is run by Rep. Tammie Wilson, a North Pole Republican and Rep. Neal Foster, a Nome Democrat. House Finance bills offered by committee typically come from the ruling caucus, which is controlled by Democrats with the help of Republicans like Wilson.

It would move $500 million from the Constitutional Budget Reserve to the dividend fund. It would preserve the current method for calculating the Permanent Fund dividend, but instead of 50 percent of earnings of the Fund going to Alaskans, they would only get 25 percent going forward.

HB 1005 does nothing to change the Percent of Market Value formula enacted two years ago, where the state draws down 5 percent of the Percent of Market Value of the fund’s Earnings Reserve Account to pay for government and pay dividends Instead, HB 1005 takes the statutory net income that goes to the dividend — now at 50 percent — down to 25 percent.

The contingency language in HB 1005 says that the formula going forward must be passed in a bill by October, but there is no bill to vote on yet. There is also no vote of the people involved, which the governor and other Republican lawmakers have called for.

If the bill was in effect for this year, the current dividend of $3,000 would be cut to $1,500.

TAPPING THE CBR WOULD BE HISTORIC

The Legislature has never before tapped the Constitutional Budget Reserve to pay the dividend, because the dividend has always come from earnings.

It appears that House Majority members are trying to bait the governor into signing off on a $3,000 dividend that has a poison pill in it — a restructuring of the contract with Alaskans and their share of oil wealth.

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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

  • Typical of most sneak attacks. Pacify the hostiles and gain time and the opportunity to sneak up behind them and have a wide open shot at their backs. Ms. Wilson is not a credit to her “political” persuasion. Nor is she anything but a rino, if actions are speaking. Power of any degree seems to do strange things to many people. Abraham Lincoln said, and I quote: “Most (men) can withstand adversity. To test their character, give them power”. How true.

  • Never gonna happen.

    They’re idiots if they don’t know he’ll veto anything like this.

    Why can’t “representatives” just represent and stop trying to do what they want? They know why we voted Dunleavy in and what we want – but like children throwing a tantrum, they won’t do it.

  • this is what dems do ; “whats mine is mine and whats yours in mine” , locally, state wide & federal.
    wish i could swing that gavel and ABORT all their half baked ideas of financial responsibilities and lies day after day .

    • Really try looking at the party of the person who proposed the bill Oh. So sad it’s a Republican

  • Whatever compromise comes from Wilson’s proposal it’s obvious that some compromise is necessary to solve the PFD dilemma.

    • Bill,
      There is NO dilemma with our PFD…
      The dilemma is with bloated government spending…
      Manly administrators in the “education” department…
      Union bosses and our $ 6 billion dollar state pension crisis…

      • You may think there is no dilemma Steve, but frankly the reason there is no budget yet is because of the situation that I call a dilemma. This is not democrat/republican or left/right but only a situation that has shown up because of what naturally occurs during recessions. Some folks are in need of resources and they’ve bought into Dunleavy’s full PFD and to hell with government needs.
        Suggesting that government is bloated is BS and doesn’t solve either the budget or PFD situation. I have no idea of what “manly administrators” are but the $6 billion unfunded pension situation has nothing to do with either the budget or PFDs. There is no budget item expressed to pay any of this unfunded pension for this budget.
        This is nothing more than certain areas of the State with more needs than others and it’s showing up in Legislature. This proposal is nothing more than a compromise in an attempt to solve this “dilemma,” and it is running into severe disappointment from those wanting the free money (they feel they were promised).

        • Bill,
          If the $6 billion in unfunded pensions is not part of the annual budget, then where does the money come from to pay the Tier 1 retired state workers year after year?

          • All employees pay into their retirement funds and difficult to tell when those unfunded funds would be needed but certainly not in near future. There just is no way to identify which retirees are involved but eventually the balances will not be there when needed. We will either pay that back or pay an increased amount due to the interest lost on those funds.
            Walker paid back some a couple of years ago ($1 billion, I think about) but I haven’t heard of a bill along those lines lately.
            This indebtedness was caused some years ago when State sued the company for blowing it and our Senator Dan Sullivan settled with the company, leaving all that money on the table. Who knows whether/not we would have prevailed as lawsuits are always a crapshoot.

          • Bill,
            You are right about Walker…
            As he Garnished our PFD’s, he silently managed to slip $1 Billion into the retirement fund with the East Coast banker club…
            Then in 2016 the state payed over another $88 million to the Barclays, etc…
            2017 they got $99 million more and in 2018 they milked another $72 million….
            So how much are we giving up this year to “the fund”???
            This is so 100’s of Tier 1 folks can keep getting over $5 K a month while Medicaid and Schools loose their funding…
            And to think Republicans are against Socialism…

            http://doa.alaska.gov/drb/retirement/tier_charts.html#.XOcuUMmIbqC

          • Steve, evidently you didn’t read my post before posting a bunch of garbage relative to State paying out money to bankers relative to retirement funds. Also, you can bitch all you want about paying out retirements to people who earned and promised to them, however if you’ve ever read Art Chance, you will have heard that as long as the state judges are on the PERS system you can forget about any attempts at getting out of these retirement promises. Anyway, those promises were made in order to keep a lid on salaries years ago and when things changed those retirements changed (I think they are on tier 4 now).
            Anyway, as I said before, there are no budget items paying anything towards that retirement shortfall in this budget. And Walker didn’t slip anything in here, but he did recognize that a debt is owed until it is paid.

          • Bill,
            You obviously have a dog in this fight…
            I remember once when you said something to the effect of all successful commercial fisherman have a wife with a full time job?
            As for what I wrote…
            It is accurate to the state pension chart that I linked to.
            The State has already invested over $9 billion in this retirement fund over the years and still has over $ 6 billion in unfunded debt ?
            Sullivan should have taken the bankers to court because obviously someone got rich with this slick road of oil money over the last 30 years.
            As for the new tiers helping out with the problem, well that will not occur until the boomers are not receiving their monthly checks.
            Read a paper by Cliff Groh from UAA written in 2018.
            He shows the unfunded debt growing over the next several years as more from your generation tap into their benefits (and use health care insurance as well).
            I am not against them getting what they earned, just not if we all have continued Austerity while pensioners have no cuts?
            I know the judges are on the PERS system as well, which is why they allowed Walker to garnish the PFD and decided in 2017 that there was no “automatic” appropriation of PFD without Legislators approval.
            This is a major elephant on our chest for gen X workers who will have nothing like these retirement benefits when we age…yet we are seeing services and education and dividends facing cuts while wages remain stagnant in AK.

          • Steve, I’ve only given you my information and as long as we’ve been back and forth on various issues you know that I don’t bullchit.
            We’ll never know whether/not the courts should have heard the case that Sullivan settled. All we know is that the State is on the hook for several billion$ that is owed to retirees and, unlike corporations that file for bankruptcy, that won’t be possible for Alaska with this huge Permanent Fund.
            You sound like a titty baby calling for pensioners to be in line for cuts rather than get what they earned (promised). This is not going to happen until the PF is bankrupt-you want that too??
            By the way, the unfunded portion of retirement funds does not increase by more retirees showing up-it’s a fixed cost that only goes up by the earnings of the funds that are missing (due to the Sullivan settlement). These could have been taken care of but politics were more interested in LIO buildings, etc. with the oil money that was flowing at the time. Now you may be on the hook but this is no fault of previous workers, just previous pols.

        • Bill the buget is bloated.

          • They evidently haven’t cut anything that effects you yet, raider. They will.

        • Bill, the budget is bloated. Our state overspends. We need a reset, and yes, it will affect everyone. There is plenty of room for streamlining and belt tightening across the board. We are one of the highest in per capital spending in the nation. That is not BS.

          • Go ahead and give a couple of examples of bloated budgets. Also, what is your area of expertise in bloated budgets, Elizabeth? Think you belong on the Finance Committee or just want your full PFD?

        • There is no government program that I can’t do without, or anyone else, for that matter. I don’t need Medicaid, the university, or the schools, or any of it. So stop repeating the mantra of necessary government spending.

          We are always asked what can be cut. I would cut all State government appropriations to the University. I would roll back Medicaid until it only goes to no more than ten percent of the population instead of the third who get it now. I would cut K-12 spending by only funding those who are mandated to attend: ages 7-16.

          If that isn’t enough I can give you more. So stop the silliness of necessary government spending. It is a fiction.

          • You are the expert on your opinion Dave but stop with the “anyone else” bit unless they elect you to speak for them. And, by the way, I didn’t mention “necessary government spending” at all-you did.
            Our elected representatives have determined the “necessary spending” level and they will continue to adjust the “necessary” part as they see fit.
            Love your bit about kicking the kids out of high school after the sophomore year-I’ll bet you have some great ideas about spending on prisons, too. Fiction??

      • Steve Stine, you are correct sir…

        Bill Yankee… not so much.

  • With 18 billion spendable, there’s no financial crisis with the PFD. Alaska’s only real crisis is with the clowns we keep electing to jobs that they haven’t a clue how to do it.

  • Every Alaskan gets guaranteed income from the State no matter. Free $$, like a Universal Basic Income. It is in the state Constitution that the citizens own the resource, isn’t that a form of socialism and should we do a PFD nationally? What would the implications be? And why do just Alaskans get the money when the all the citizens of the USA bought the land from Russia?

    • Might be helpful to know what a “dividend” is; how royalties or dividends actually work, what Alaskan residents gave up for their “dividends”…

    • In any other state, if you buy property, you own your land and everything in the ground – it’s called mineral rights. If a company wants to do exploratory drilling for gas or oil on your property, they have to get your permission first and pay you. If they found gas or oil or gold or copper on your land and put a well in or mine your land, you get paid a royalty check for that. In Alaska, we don’t actually own our “land” /mineral rights – the state does. And the state and oil companies don’t need the landowner’s permission to come on their land and drill or mine. In fact, the state can kick you off your land to carry out drilling or mining and you won’t receive any compensation. The state owns ALL the mineral rights, for the ENTIRE state, and the state decides which companies to lease the mineral rights to for drilling and mining purposes. In return, the oil and mining companies pay the state a royalty, and the state passes a portion of that royalty on to it’s residents in the form of a yearly PFD check. So, it’s not a basic universal income, it’s actually a royalty payment for our land/mineral rights.

  • Wilson is finished. Republicans have no reason to trust her anymore. The blonde look pretty much tells it all.

    • I agree Tammie’s done. Who is going to primary her or run in her place? Will they be able to withstand the lobbying persuasion of the state employees that live in Juneau? Even their own staff lobby congress for more money. We need a solid, conservative candidate with the charm of Ronald Reagan and the determination of Donald Trump – and the chutzpah and intelligence of Joe Vogler. Lay off the blond references – that doesn’t help our cause Patriot – Wilson has committed political suicide, but that doesn’t mean she’s a stereotype. Who do we have that is willing to fight FOR us. This is a dilemma – not because we don’t know that we need to cut spending, but because for every expenditure there is a constituency screaming not just to keep it but for more. Those constituents all look at the PF as a piggy-bank just waiting to be tapped. That would be WRONG – it’s just stealing. There are at least 4 pools of oil that we aren’t tapping the size of Prudhoe Bay – FILL THE PIPE. To do that we need to: reduce regulation and work with the oil companies (heaven forbid!) to reduce their costs so we can compete with North Dakota – whatever deal gets cut with big oil needs to be a net significant gain for the state. We don’t need taxes, we don’t need to rip-off the PFD, but we do need to look seriously at spending.

      • Looking is about all that’ll happen until people like you actually take office.
        .
        Want an idea how things got this way and stay this way, look at Alaska’s 2019 Lobbyist Directory, maybe download it and save it as an Excel spreadsheet.
        .
        You’ll be able to add up what all the buyers pay all the lobbyists to get what they want.
        .
        When a critical, world-ending issue comes up, you’ll be surprised how often you can, through the miracle of ctrl , find out who’s buying whom to make it happen.
        .
        And that’s only the stuff we know about…

      • Thanks Rich. All on point.

  • Must be a sign of the times when hints of duplicity and fourberie are among the first things one expects from the “House Finance Committee” or for that matter, any other committee in the Peoples Imperial Legislature….
    .
    Think about this: “…which means it’s no longer a dividend from the Permanent Fund at all, but is simply a cash payment to Alaskans.”
    .
    If it’s not a dividend anymore, is it possible the House Finance Committee assumed authority they do not constitutionally have to abrogate the law or agreement that created the dividend?
    .
    So, what are we going to do about it?

  • This is what happens when democrats run things.

  • You people keep voting in democrats! Enjoy the fascism!!

  • As of this writing. 1 in support of HB 1005 and even then with caveat! Tammie is getting hammered! Public testimony again at 5 PM as well! CALL

  • These THIEVES need to be removed from office!! ALL OF THEM!!
    CUT THE BUDGET WHINERS!!
    PUT THE PFD BACK THE WAY IT WAS INTENDED AND LEAVE IT ALONE.

  • It’s the people’s money, not the state’s. Get your hands off the PFD legislature!