House votes to restore PFDs to full $2,700

The board shows the House vote to amend the budget to restore permanent fund dividends, March 26, 2018. The vote was 21-19. (Photo by Andrew Kitchenman/KTOO)

The Alaska House voted 21 to 19 Monday to restore the full amount for Alaska Permanent Fund dividends this year. PFDs would be roughly $2,700.

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The vote would add $892 million to the proposed state budget. This would decrease state savings, since there is no new revenue to offset the increase.

Minority-caucus Republicans provided most of the support for restoring the dividends to the full amount set under a legal formula used up until two years ago. It would be the largest amount in state history, without accounting for inflation.

Eagle River Republican Rep. Dan Saddler said the PFD shouldn’t be cut until the budget for state government services is smaller. He supported cutting a study of vitamin D deficiency funded in the budget.

“The budget is rising, despite the efforts of me and my caucus to hold down, to reduce the size of government, and even to just to slow the rate of increase, have been unsuccessful time after time after time,” Saddler said. “If we have a half-million dollars to spend on vitamin D, I have a very difficult time standing up and supporting a reduced dividend.”

The mostly Democratic House majority was nearly evenly divided. Ten voted for the funding, while 12 voted against it.

Anchorage Democratic Rep. Geran Tarr said the PFD shouldn’t be cut until the Legislature passes a plan that closes the long-term gap between how much the state spends and how much it brings in. The majority has proposed higher oil and gas taxes or a tax on income as part of a comprehensive plan.

“It shouldn’t lie on the shoulders of our children, our seniors, our veterans, and those on fixed incomes and … lower-income Alaskans to solve the budget crisis,” Tarr said. “Everybody needs to give in a way that’s meaningful, and those are the Alaskans who have given the most so far.”

Some opponents also say PFD cuts hurt lower-income residents. But they say that a larger PFD this year threatens future PFDs by chipping away at permanent fund earnings, as well as funding for state services.

Fairbanks Democratic Rep. Adam Wool said the state can’t afford the full amount.

“I know there are some people that make counterarguments that, ‘Since we didn’t get a more distributed revenue package that we should ditch this,’” Wool said of the reduction. “But I’m not one of those people. I think this is really important, to stick with it, stick with our plan and forge ahead.”

And some opponents, like Anchorage Rep. Chris Birch, argued that the PFD spending mirrors larger patterns in state spending. He was one of seven minority-caucus Republicans to vote no.

“I think it’s spending money we don’t have,” Birch said. “We’ve got a reputation collectively of doing that. And I think we can’t afford it. I think we need to take a very hard look at this budget effort.”

Gov. Bill Walker vetoed roughly half of the PFD money in 2016, and the Legislature cut the amount by more than half last year.

The House adjourned Monday after taking the vote. It’s not clear how the House will fund the PFD. And it’s not clear what will happen to the PFD in the Senate. Last year, the House proposed $1,250 dividends and the Senate proposed $1,000 dividends. They compromised on an $1,100 amount.

This map represents the vote on whether to restore the full amount of permanent fund dividends in the budget. Green districts are represented by House members who voted yes, while red districts are represented by those who voted no. (Map by Mikko Wilson/KTOO)