Update: 5:52 p.m. Aug. 25, 2017
Current and former lawmakers who lost a court battle to reverse recent cuts to Permanent Fund dividends say they’ll continue to push lawmakers to make full PFDs part of the Alaska Constitution.
The Alaska Supreme Court unanimously agreed to Justice Daniel Winfree’s opinion. He wrote that the state law that started PFDs is subject to the Alaska Constitution’s ban on dedicating funds for specific purposes.
The unanimous opinion said the amount spent on dividends is decided each year through the budget process. Gov. Bill Walker cut PFDs in half by a veto last year, and the Legislature cut them by a larger amount this year.
Anchorage Democratic Sen. Bill Wielechowski and former Sen. Clem Tillion and Rick Halford had argued that the constitutional amendment that started the Permanent Fund gave the Legislature the ability to dedicate uses for fund earnings, like the PFD. They said dividend amounts should be set by the law that started the dividend, and not the budget process.
Wielechowski said he’s disappointed PFDs will no longer follow the formula that was used through 2015.
“What the Supreme Court has said today is, ‘You can ignore it,’” Wielechowski said. “And so what this means is that any governor can set the Permanent Fund at whatever level he or she chooses, any Legislature can set the dividend at whatever level it chooses.”
Wielechowski said he hasn’t made up his mind about whether he’ll run for governor.
“I want someone who shares my vision of where we should head as a state,” Wielechowski said. “I don’t have that with this governor. And so, it’s not something that I would prefer to do.”
Wielechowski added that he’d like to see former U.S. Sen. Mark Begich run for governor.
Walker’s veto cut last year’s dividend from $2,052 to just under half that amount $1,022. This year, the Legislature reduced PFDs from roughly $2,300 to $1,100.
Attorney General Jahna Lindemuth said the decision will benefit state finances.
“I know this is not a decision Gov. Walker took lightly, but I’m glad we have more clarity around use of Permanent Fund earnings as we continue to try and resolve the state’s fiscal crisis,” Lindemuth said in a statement.
Walker last year and legislators this year cited the state’s $2.4 billion budget gap in reducing the dividends.
The court’s opinion finds that the people who wrote the Permanent Fund amendment to the constitution didn’t intend to allow the Legislature to dedicate money for other purposes, in a way that bypasses the budget process.
Clem Tillion has been a leading voice in defending the dividends.
“I’m sorry about the decision,” Tillion said. “It just means we have to go into full battle mode and take it to the people.”
Tillion would like to amend the state constitution to enshrine full PFDs. Two-thirds of both chambers of the Legislature must pass an amendment before it goes to voters. Tillion plans to seek an initiative on next year’s ballot urging the Legislature to pass a PFD amendment.
Tillion said that initiative would affect the general election.
“I think that if the people overwhelmingly support this change, that legislators that overwhelmingly support this change will be the ones that get elected,” Tillion said.
If the Legislature doesn’t put forward a constitutional amendment, Wielechowski noted that voters could approve a constitutional convention to make full PFDs permanent. The next time voters will be asked whether they want a constitutional convention is in 2022.
On Friday, The Alaska Supreme Court upheld Gov. Bill Walker’s veto that halved Permanent Fund dividends last year.
Justice Daniel Winfree wrote that the state law that started PFDs is subject to the Alaska Constitution’s ban on dedicating funds for specific purposes.
Anchorage Democratic Sen. Bill Wielechowski and former Sens. Clem Tillion and Rick Halford had argued that the constitutional amendment that started the Permanent Fund gave the Legislature the ability to dedicate uses for fund earnings, like the PFD.
Walker’s veto last year cut dividends from $2,052 to $1,022. This year, the Legislature reduced PFDs from $2,300 to $1,100.