Mon. Jul 6th, 2020

Alaskan House Approves $1,600 Permanent Fund Dividend

2 min read
The Alaskan House of Representatives

The House was split on party lines (22–12, six absent), the bill is set to go to the Senate.

Even with potential approval of the Senate, Gov. Dunleavy remains steadfast in his support of a $3,000 dividend. Gov. Dunleavy stated that he firmly believed that the state should follow the traditional payout formula — which would make the dividend $3,000.

Most of the House opposes the idea on budget grounds. The state’s budget is filled more by the investments financed by the Permanent Fund than by taxes, and with the current level of expenditure, the traditional formula would break the spending limit.

Jennifer Johnston, a representative from Anchorage, stated that she considered this bill a compromise.

The bill utilizes $172 million from the budget reserve to increase the dividend amount, while still keeping to the last year’s spending limits.

All dividend projections vary from the final sum since it is dependant on the number of people who apply for the dividend.

Opponents of the bill disagree that this is a compromise and refuse to budge from their $3,000 dividend demand.

Rep. Tammie Wilson, R-North Pole, claims that their opposition isn’t based on the amount as much as the fact that state law has established a specific formula and that the formula should be respected.

Due to a 2017 Alaska Supreme Court decision, other lawmakers believe that the Legislature is allowed to diverge from the formula. Especially due to the pressure of remaining other last year’s limit on Permanent Fund spending.

Even after Gov. Dunleavy’s veto on an additional $444 million from the state’s budget, spending is expected to go above the cap if the traditional dividend formula is followed. The coalition majority favors reducing the dividend instead of violating the cap in its second year of existence.

The governor and House minority strongly disagree. Stating that the dividend isn’t a simple payout as much as an Alaskan’s share of the collectively owned natural resources.

Rep. Sarah Vance, R-Homer, stated that the dividend wasn’t welfare, it was a share of the natural resources of Alaska.

The Permanent Fund contains enough money to pay out according to the traditional formula while still funding the budget. This, however, is only possible if lawmakers willingly violate the spending cap.

Gov. Dunleavy stated that he was open to a possibility of a formula change after the House approves a $3,000 dividend this year.

With the minority and several Senators likewise in favor of a $3,000 dividend, compromise seems distant. The impasse between the governor, House, and Senate is raising concerns that there will be no dividend this year.

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