Alaskans eager to know how much their permanent fund dividend will be this year, as well as when they’ll get it, will have to wait some more. The dividend is caught up in a broader debate over state budget policies. And a legal disagreement could affect its size even if lawmakers settle on an amount.
The House of Representatives passed a bill on Tuesday aimed at funding PFDs at $1,100. But the final amount isn’t clear.
Lawmakers who worked on this year’s budget already tried to pass an $1,100 PFD. Some of the money failed to pass with the support of three-quarters of both chambers, the required amount.
Then Gov. Mike Dunleavy vetoed the rest.
So the House tried again and landed on the same number. There’s a reason for that — it’s the amount lawmakers have said the state can afford without drawing more than planned from permanent fund earnings.
Now the bill goes to the Senate. And Senate President Peter Micciche, a Soldotna Republican, said it’s confusing for Alaskans who’ve heard dividends would be different amounts.
“Alaskans are expecting a PFD in October,” he said. “And while we’re sitting in here fiddling around, until almost October … It’s on us to work it out like adults and figure out a way to get that check out to Alaskans that happen to be — many of them happen to be in need right now.”
Dunleavy has proposed a dividend of $2,350 as part of his plan to put the dividend in the state constitution. That amount equals half of what the state draws from the fund and is also known as a 50/50 PFD. And it’s less than the full amount under the formula, which would be roughly $3,800 this year.
Micciche has voted in favor of a 50/50 PFD earlier this year. But he says it may be difficult to get a consensus at that level; House minority caucus proposals for higher dividends failed.
“There was not support for a 50/50 PFD in the House,” he said. “In fact, they lost ground. We saw there was not support for a full dividend in the House. Well, the Senate will have a different position.”
A major challenge for having a higher level is that many legislators don’t want to draw more than planned from permanent fund earnings. Some have said they would be willing to if it was part of a bigger solution to the state’s long-term budget problems. But the Legislature hasn’t been able to reach a solution on these problems for more than five years.
Even if both chambers of the Legislature pass a $1,100 PFD, the check may still end up being smaller. That’s because nearly half of the money would come from an account the Dunleavy administration says is empty. It has said the money in the account was swept out of it after three-quarters of both legislative chambers failed to agree to keep it there.
Assistant Attorney General Cori Mills told the House Judiciary Committee that the money can’t be spent.
“You basically have no money in that fund from which to do any new, additional appropriations,” she said.
Some legislators disagree, and point to a recent Superior Court decision. In it, the judge wrote that the account is one of several that is separate from those that are subject to the three-quarters vote. But the case wasn’t focused on the issue.
Megan Wallace, the Legislature’s top legal adviser, said the ruling could provide the basis for paying for PFDs from the account the state says is empty. It’s known as the Statutory Budget Reserve, or SBR. And she says if the Legislature and the Dunleavy administration disagree over it, the Legislature could sue.
“I could … see a potential for litigation, particularly if there’s a disagreement about how much money from the SBR is available to the Legislature for appropriation,” she said.
House Speaker Louise Stutes, a Kodiak Republican, said House majority leaders aren’t looking for a lawsuit. But they believe the account can be used to fund the dividends. She hopes the Legislature and Dunleavy reach an agreement, but if they don’t the Legislature may have to go to court.
“If we come to that point, I guess that’s the direction it’ll go,” she said. “Hopefully, it will not come to that point.”
The bill to fund PFDs is currently being considered by the Senate Finance Committee. And if the current special session isn’t able to resolve this year’s PFD amount, Dunleavy and lawmakers are already talking about a fourth special session this year.