A group of Democratic lawmakers is pushing an amendment to enshrine the Permanent Fund dividend in the Alaska Constitution.
Rep. Les Gara of Anchorage is carrying the legislation for his caucus, and he presented it to the House State Affairs Committee on Thursday. He says because the state is looking at budget deficits for the foreseeable future, it’s important to lock in the dividend as a right.
“As fiscal pressures start mounting in the state, there are some – and it’s happened in the past – who the first place they’re going to go is to the Permanent Fund dividend,” says Gara.
Gara also frames it as an issue of income equality.
“We’ve had the least differential growth between rich and poor in the state of any other state in the country because of the Permanent Fund dividend,” says Gara.
While all but one member of the House’s Democratic minority has signed off on the amendment, members of the Republican majority are a little cool on it.
Rep. Alan Austerman of Kodiak says that while he’s willing to entertain the amendment, he believes it could end up putting the Legislature in a difficult financial position.
“The Permanent Fund and the dividend program itself were to look at future needs of the State of Alaska. Not necessarily the future needs of each individual, but the future of the state,” says Austerman.
House Speaker Mike Chenault says if the Legislature were prohibited from tapping the Permanent Fund, they would just have to find other ways to collect revenue should the state run out of savings.
“When we talk about that type of long-term planning, it means one thing: taxes,” says Chenault.
He says the most likely forms would be an income tax or state sales tax.
As of this year, state savings were valued at $17 billion. The State’s Legislative Finance Division projects that reserves may last until fiscal year 2024 if state agencies are kept at zero growth.
The Alaska Permanent Fund is worth nearly $50 billion.
The amendment needs the approval from two-thirds of the Legislature to advance, and minority Democrats make up just one quarter of the body. If it passes, it would then go on the ballot for voters to decide.