Alaska Senate Finance Committee advances new PFD formula bill to the floor

The Alaska Senate has advanced a new PFD formula bill to the floor where it could be amended.
Published: Apr. 21, 2022 at 6:12 PM AKDT
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JUNEAU, Alaska (KTUU) - The Alaska Senate Finance Committee has advanced a bill to the Senate floor that would set a new 50-50 Permanent Fund dividend formula in statute, but that would currently be contingent on the Legislature implementing new revenue measures by the end of 2026 that raise $800 million each year.

The bill passed out of the Senate Finance Committee and onto the floor with several legislators raising objections. Sen. David Wilson, R-Wasilla, and Sen. Bill Wielechowski, D-Anchorage, said they hoped it would be amended during debates on the Senate floor.

Wielechowski said the only way to provide certainty for the dividend is to put it in the Alaska Constitution. Sen. Natasha von Imhof, R-Anchorage, said she opposed the idea of imposing taxes on Alaskans to then pay a larger dividend.

”Why should we take money out of someone’s paycheck only to turn around and deposit it into the checking account of their neighbor?” she asked.

If Senate Bill 199 passes as written, the dividend paid this year would follow the 50-50 formula at almost $2,600 for each eligible Alaskan. For the next four years, the dividend would be cut in half, following the 75-25 split from a now-annual draw from the Permanent Fund that’s used for state government services and the dividend.

Under that model, the PFD amount paid to Alaskans would increase steadily to around $1,600 by 2027.

If the Legislature implements $800 million in new, annually recurring revenue measures by the end of 2026, the dividend would then follow the 50-50 formula model supported by Gov. Mike Dunleavy and a bipartisan and bicameral fiscal policy working group last year. The PFD would be over $3,200 in 2027.

The House of Representatives passed an operating budget last month that would pay a dividend of around $1,250, effectively following the 75-25 split, and a separate one-time energy relief check at $1,300. Added together, the two checks roughly equal the 50-50 dividend that would be paid through the Senate’s PFD formula bill.

The Senate’s budget does not currently contain a dividend, with it instead set to be paid through SB 199.

The Senate Finance Committee heard amendments to the operating budget on Thursday. Sens. Bert Stedman, R-Sitka, and Click Bishop, R-Fairbanks, are pushing for the state to have $4 billion in savings from a windfall of revenue from high oil prices once operating and capital expenses are paid.

That savings figure would include $1.2 billion set aside to forward fund K-12 education a year ahead of time. The Senate’s budget would also currently broadly follow a proposal passed by the House to increase per student school funding by $60 million.

The Senate’s budget also contains a provision to put any revenue raised from oil over $100 a barrel into the constitutionally-protected part of the Permanent Fund. Current forecasts are that roughly $100 million would be set aside in the corpus.

Amendments to the operating budget are set to be heard in the Senate Finance Committee again next week, Stedman said. He added that the goal is to finish up the Legislature’s work a few days before the constitutional deadline for the legislative session, which is on May 18.

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