By James Brooks
Alaska Beacon 

Alaska House rejects proposal to put the PFD in state constitution


April 17, 2024

The Alaska House of Representatives on April 11 rejected a constitutional amendment that would have guaranteed payment of the annual Permanent Fund dividend.

The final vote was 22-18, five votes short of the two-thirds majority required to advance the amendment to the Senate for further debate.

If it had won legislative approval, the amendment would have gone to the public in this fall’s general election.

The amendment was part of a plan created in 2021 by a bipartisan working group after the state came within a week of a government shutdown due to disputes over the size of the dividend.

Nikiski Rep. Ben Carpenter was a member of the working group and the author of the proposed amendment. He said the failed vote in the House doesn’t mean the end of the end of the plan envisioned by the working group.

“There’s enough people who want to see something happen,” he said. “We’ll just regroup.”

From 1982 through 2015, the size of the dividend was set by a formula in state law. In 2016, amid falling oil revenue, then-Gov. Bill Walker vetoed half the dividend to balance the state budget for public services.

After a subsequent lawsuit, the Alaska Supreme Court ruled that the dividend is subject to the annual budget process, the same as any expenditure of state funds for public services.

“Absent another constitutional amendment, the Permanent Fund dividend program must compete for annual legislative funding just as other state programs,” Supreme Court Justice Daniel Winfree wrote at the time.

Every year since that decision, the Legislature has set the amount of the dividend by political negotiation, and debates over the amount have repeatedly brought Alaska to the brink of a government shutdown.

House Joint Resolution 7 would require the state — starting in 2025 — to pay a Permanent Fund dividend “according to a formula set out in law.”

The problem with that idea, said Anchorage Rep. Andy Josephson, one of its most vocal opponents, is that the current formula in state law would produce an unaffordable dividend and create a budget deficit of more than $1.5 billion.

This year, for example, the traditional formula calls for a roughly $3,500 dividend that would cost $2.27 billion, almost three times the size and cost of last fall’s payment to Alaskans.

Carpenter and other supporters of the amendment responded to Josephson’s criticism by saying that nothing prevents the Legislature from simply changing the formula in state law.

Homer Rep. Sarah Vance, a supporter of the constitutional amendment, urged her fellow lawmakers to have “faith” that the Legislature will be able to change the dividend formula.

Fairbanks Rep. Will Stapp voted in favor of the amendment but warned about the costs of the current dividend formula in state law. “The only way that’s sustainable is if you tax people — and oil companies too — or massively cut government spending,” he said.

The Alaska Beacon is an independent, donor-funded news organization.


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