Permanent Fund dividends would still be cut, but not as much, under a new version of a bill to restructure fund earnings.
The House Finance Committee introduced a new version of Senate Bill 128 today.
Dividend checks would drop by about $500, instead of the $1,000 cut included in the Senate’s version of the bill.
After two years, the dividend would depend on the price of oil. It’s currently projected to fall to $1,000 per year. But it would rise to as much as $2,000 again if oil prices reach $130 per barrel.
Rep. Les Gara, D-Anchorage, plans to vote for the bill.
“I understand those people who have a hard time voting for this given that so much is still being paid to oil companies in corporate subsidies,” Gara said. “On the other hand, I have a fear that every one of these bills that we see in the future is just going to get worse. But a main feature is that the dividend has a chance to grow much larger than all of the prior versions of this bill.”
In addition, the new bill lessens the impact of a limit to combined state revenue from earnings and the oil and gas industry. In years with high oil revenue, more money could be spent on the state budget.
As a result of the changes, the bill would draw less money from fund earnings to reduce the state’s deficit.
Some House members say the changes make the bill worse. North Pole Republican Tammie Wilson says any cut to PFDs should be put to a referendum.
“Without a vote of the people, it’s never the right time” to cut PFDs, Wilson said. “We need to go out and we need to ask them. They need to participate in this discussion, and then we need to follow their will.”
Gov. Bill Walker has called the bill the centerpiece to his plan to make the state budget more sustainable.
It’s not clear whether the bill will have enough votes to pass the full House, and it may face a higher hurdle in the Senate.
