The House Finance Committee raised its proposal for the permanent fund dividend to $1,600.
A new version of a House Bill 2001, which would set the dividend amount, would also restore funding for most items vetoed by Gov. Mike Dunleavy. But it would accept $89 million in vetoes, including $20 million in cuts to the University of Alaska, a $49 million cut to school bond debt reimbursement and a $20 million cut to rural school construction.
Nome Democratic Rep. Neal Foster said the bill strikes a balance.
“This was just trying to balance all of the different interests of folks who wanted more cuts, folks who wanted a higher PFD, folks who didn’t want to go into savings,” he said.
He noted that the measure relies on using all $172 million in the Statutory Budget Reserve, a piggy bank the state has largely emptied in recent years.
Wasilla Republican Rep. Colleen Sullivan-Leonard said the state should use more permanent fund earnings to pay out the full amount of dividends under the formula in a 1982 state law. That would be roughly $3,000.
“I just need to make this statement and ask how we’ve come to this decision of just not coming to the earnings reserve account to pay for a full statutory PFD?” she said. “The funds are there. The funds are there to pay for general government. They’re there to pay for the disbursement of the statutory permanent fund.”
Paying the full PFD would require the state to violate a different law that limits the amount drawn from permanent fund earnings. Members of the legislative majority caucuses in both the House and Senate have expressed concern that violating that law would set a bad precedent. They said it would threaten the long-term sustainability of dividends, state services and the Alaska economy.
If the Legislature passes the bill without the full PFD, Dunleavy could veto it. He supports full dividends.
The committee voted along caucus lines, 7-3, to advance the bill.