The state budget the Senate is scheduled to debate on Monday includes a $1,000 permanent fund dividend.
Sitka Republican Sen. Bert Stedman proposed the $1,000 during a Senate Finance Committee meeting on Saturday. He says spending more would leave the state less prepared for future budget problems caused by the sharp drops in oil prices and the Alaska Permanent Fund’s value.
“I don’t think this is going to be a two- or three- or four-month issue,” he said.
The committee passed the proposal, four to three with Senators Lyman Hoffman, a Bethel Democrat; Donny Olson, a Golovin Democrat; David Wilson, a Wasilla Republican; and Stedman in favor. Voting no along with Wielechowski and von Imhof was Fairbanks Republican Sen. Click Bishop. He said he would like the dividend to be higher, but he’s afraid it might be the last dividend for a while.
Senators on the committee rejected a proposal from Anchorage Democratic Sen. Bill Wielechowski that would have paid out another emergency $1,000 dividend in June. He wanted to tap into the Permanent Fund’s earnings to help workers and businesses affected by COVID-19.
“We’ve often referred to the Permanent Fund as the rainy day fund,” he said. “It is raining. It is pouring. Alaskans are suffering. I’m worried for the people in my district. I represent a district with many low-income, working-class people.”
Olson, Wielechowski and Wilson voted for the emergency dividend. Bishop, Hoffman, Stedman against it. Anchorage Republican Sen. Natasha von Imhof voted against both proposals.
“I think to pay a large dividend at this point has serious fiscal consequences,” she said. “I would rather focus on paying stimulus money and COVID-19-associated money directly to the people who truly need it, in regards to food security …, energy assistance, supplemental unemployment benefits.”
If the Legislature ultimately approves the $1,000 dividend, it will be the lowest amount since 2013.
It’s not clear if lawmakers will approve more funding for COVID-19 relief. But, nonpartisan legislative budget analysts project that if the Legislature were to combine $1,000 dividend with $300 million in COVID-19 spending, the state would have to make an unplanned draw from the permanent fund earning reserve for the first time.
The House passed its version of this budget bill earlier this month. Once the Senate passes it, the House would either have to agree to the Senate’s change or the bill will be sent to a conference committee to hash out their differences.
Senators say the session could last a few more days.