This year’s permanent fund dividend would be $1,100 under a compromise budget proposal that the Legislature will vote on this week.
A committee composed of both senators and House members agreed to a budget that would set the dividend at less than half the roughly $2,350 amount that Gov. Mike Dunleavy proposed and the Senate passed during the regular session.
Fairbanks Republican Rep. Bart LeBon voted for the $1,100 dividend amount. He said he was concerned that drawing more than planned to pay a larger dividend would threaten the long-term health of the permanent fund.
“Protection of the permanent fund itself is a high priority in my thinking and this accomplishes that,” he said.
The committee passed an amendment to the budget that would make most of the dividend funding dependent on spending money from a state piggy bank known as the Constitutional Budget Reserve, or CBR. That would require a vote of support from three-quarters of both chambers. The amendment also makes more than $30 million in funding for projects in Matanuska-Susitna Borough dependent on the vote to draw from this reserve.
Sen. Bert Stedman said the amendment could build support for this vote.
“It certainly encourages some folks to seriously consider what vote they’re going to, what position they’re going to take on the CBR,” he said.
The CBR vote preserves funds for dozens of programs that pay for everything from offsetting the cost of electricity in rural areas to university scholarships. But members of the Republican House minority — including several Mat-Su lawmakers — have withheld their votes the past two years in efforts to pay higher dividends.
If the CBR vote fails, dividends would be $525. That would be the lowest in the program’s history, when adjusted for inflation.
Stedman said the budget would allow for a dividend in a similar range to $1,100 next year, without drawing more than planned from permanent fund earnings.
Members of both chambers will have a chance to vote on the changes later this week. Committee members have expressed hope that the budget will pass before Thursday, when state workers are scheduled to receive layoff notices due to delays in the budget passing.
The compromise budget would transfer $4 billion from the permanent fund’s earnings reserve — which is not protected from legislative spending — to the constitutionally protected principal.
And it reduces funding for all abortions paid by Medicaid. Alaska courts have found that previous legislative attempts to end abortion funding violated provisions of the state constitution.
Dunleavy criticized the dividend amount in a post on social media Sunday. He said it provides proof that the dividend should be protected in the state constitution. He has proposed to do that through a constitutional amendment. Legislators have already raised questions about how he would pay for higher dividends.