A new bill introduced in the Alaska House of Representatives on Wednesday would provide Alaskans with a roughly $3,000 permanent fund dividend this year, but it would reduce dividends in future years.
House Bill 1005 could provide the basis for breaking the current impasse over the budget and dividends. But it’s unclear how much support there is for the bill in the Legislature.
North Pole Republican Rep. Tammie Wilson worked on the bill. Wilson said paying out the full dividend this year under a formula set in 1982 would depend on changing the formula for the future.
“This bill’s tied together,” Wilson said. “You don’t get a full dividend without changing the formula.”
The bill would set dividends in future years at 25% of the fund’s average earnings over the previous five years — half of the amount under the 1982 formula.
Lawmakers have struggled to close the gap between what the state spends and what it raises. Each of the options have been unpopular among at least some Alaskans. They include dividend cuts, reductions to public services and new or higher taxes on income or oil.
Senate President Cathy Giessel, an Anchorage Republican, said the bill will advance the conversation in the Legislature over dividends and the budget.
“We want to preserve this legacy program that Alaskans have come to count on,” she said. “At the same time, we want to think about the future, and how to maintain the program going forward.”
Gov. Mike Dunleavy has opposed changing the dividend formula without a vote by the public. Dunleavy has not proposed new taxes. But he did propose transferring oil property taxes and a fisheries tax from municipalities. Those proposals haven’t advanced in the Legislature.
HB 1005 would result in a projected dividend of between $1,500 and $1,600 in future years. A Senate Finance Committee proposal, Senate Bill 103, would set dividends at half of the annual draw from fund earnings, or roughly $2,300. But it would also leave a more than $800 million gap in the budget.
The House Finance Committee is scheduled to hold a hearing on the House bill on Thursday.