While the Legislature considers making changes to how Alaska Permanent Fund earnings are spent, a pair of former lawmakers are working to block a reduction to Permanent Fund dividends.
Clem Tillion has a message to lawmakers who want to reduce the PFD: Don’t think any changes you make are going to last.
“I’m opposed to any changes in the Permanent Fund and I’ll fight it,” Tillion said. “And we’ll raise the votes if necessary to put it back the way it is if they change it. The fund belongs to the people. It was given to the people.”
Tillion was a Republican senator when the Permanent Fund was created. He’s an active 91 year old and attended the North Pacific Fisheries Management Council meeting last week, visiting Juneau from his home in Halibut Cove.
Tillion and former Republican senator Rick Halford joined with Anchorage Democratic Senator Bill Wielechowski in a lawsuit to reverse Governor Bill Walker’s veto that halved PFDs last year.
Tillion’s hopeful they’ll win in court. If not, he’s confident they’ll win a ballot question next year to reverse any changes to the fund.
“To take something from the Permanent Fund that belongs to the people – you’re taking money away from some widow in Emmonak and making some guy that comes from Lake Charles, Louisiana, and works on the North Slope go home without paying any taxes – that’s absolutely idiotic,” Tillion said. “If they come here to work and take our resources, they should pay something.”
Anchorage Superior Court Judge William Morse ruled in November that Walker had the authority to veto the money.
According to Tillion, the state could still draw money from Permanent Fund earnings at roughly one billion dollars per year to pay for state government, and the Legislature can do it within the current law.
“The thing is, to change the law in any way is a declaration of war,” Tillion said.
Tillion would close the rest of the two and a half billion dollar budget gap with taxes on income, sales, motor fuels, and businesses. The Legislature hasn’t agreed on any new taxes, and no lawmaker has introduced a sales tax.
“We have a good system,” Tillion said. “Leave it alone. Let it do its thing.”
Halford agrees. He was House majority leader when the Permanent Fund dividends were started.
“Looking to the Permanent Fund, without looking to all the other potential solutions at the same time and in somewhat equal measure, is a very serious mistake,” Halford said.
Halford will join Tillion and others in reversing any changes to PFDs if they don’t win in court first.
“The dividend is based on a formula,” Halford said. “It’s not based on the whim of a governor. It’s not based on a legislative appropriation.”
Halford said tying the dividend to the fund’s performance – like the current system – keeps Alaskans interested in the fund.
Walker and the Legislature have proposed turning the dividend into a predictable amount based on the fund’s total value. It would fall from more than 2200 dollars currently forecast to one thousand dollars in the Senate bill and 1250 dollars in the House bill.
Both bills would also allow the payment to state government to be predictable. Walker and financial experts say this is a necessary step to stabilize the state budget.
The state Supreme Court will hear arguments on the Permanent Fund lawsuit on June 20.