Not content with the $1,100 Permanent Fund dividend adopted on the final day of the special legislative session that ended Tuesday, Gov. Mike Dunleavy three hours later called lawmakers back for a fourth special session starting Oct. 1 to “get the rest of this year’s PFD.”
Dunleavy, who is running for reelection next year, has been promoting a dividend this year of more than double the $1,100 approved by legislators.
The Department of Revenue has said it would send the payments to Alaskans about 30 days after the measure is signed into law, putting this year’s checks a couple weeks late from past PFDs.
Back in June, Dunleavy vetoed a legislatively approved dividend that he said was too small at about $525. This time, however, he said he will not veto the $1,100 payment, but rather will keep pushing for a second check to Alaskans.
The governor said lawmakers also should resume work Oct. 1 in Juneau “to solve the state’s financial problems with a complete fiscal plan,” in addition to a larger PFD.
To pay a larger dividend, the governor has proposed withdrawing an additional $3 billion from Permanent Fund earnings to carry the state until other revenues can balance the books. Most legislators have rejected his plan to take more money out of the savings account to pay dividends that would be about double the average of the past decade.
Dunleavy said Tuesday it has been a profitable year for Permanent Fund investments, and he believes the account can afford the extra withdrawal.
The state’s 45-year-old oil-wealth savings account grew by about $12 billion from Jan. 31, 2020, before the worst of the pandemic economic meltdown, to almost $80 billion — net of liabilities — as of the most recent financial statement on July 31, 2021.
Though the governor has argued for pulling more money out of the fund to boost the dividend, many legislators view it as risky — arguing that it could weaken the fund and reduce future earnings. While the past 12 months have been profitable for the Permanent Fund, bad investment years happen, such as fiscal year 2009 when the account lost $6.9 billion.
In addition to debating the amount of this year’s PFD and a new calculation formula for future years, the governor and lawmakers have been unable to agree on a comprehensive, long-term fiscal plan covering dividends and public services. They disagree on the new revenues — taxes — that would be needed to help close a gap between revenues and expenses that could approach $1 billion a year under the governor’s large-PFD plan.
Dunleavy has acknowledged that new revenues will be part of any solution but has not proposed or endorsed any significant tax measures, sticking with his proposal to withdraw money from the Permanent Fund to buy more time.
The final day of the special session had added drama when the House early in the day adjourned, leaving the Senate with the option of either accepting the House-passed bill with an $1,100 PFD — or nothing. With the House done for the session, the Senate could not change the House bill or approve its own measure, as final legislation needs approval by both chambers to become law.
Though some senators grumbled at the House move, the Senate’s final vote for passage was 12-7.
Voting against the bill were Republicans Mia Costello and Roger Holland, of Anchorage; Lora Reinbold, of Eagle River; Shelley Hughes, of Palmer; Mike Shower, of Wasilla; Robert Meyers, of North Pole; and Democrat Donny Olson, of rural Golovin (east of Nome). Anchorage Democrat Bill Wielechowski was excused from Tuesday’s session.
Shower had proposed a $3,800 PFD, but it failed 8-11. Even if it had passed Tuesday, without the House in session it could not have moved ahead.
A day before adoption of the dividend funding bill, lawmakers lost their final opportunity to pass a measure that would have eased the rules for telemedicine, which enables doctors and patients to meet online.
Intended to help health care providers better serve their patients during the in-person limitations of the pandemic, the legislation became a magnet for amendments that ended its chances at passage.
The Senate last week added language that would have allowed Alaskans to opt out of vaccination mandates. The House rejected those amendments, but then added its own language on Sunday that could have blocked hospitals from limiting visitors to patients during the pandemic.
As the measure was dragged deeper into pandemic politics, House leadership pulled the bill from the agenda and sent it back to committee to die.
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