The Senate Finance Committee has advanced a bill that would set a new formula for Alaska Permanent Fund dividends.
Senate Bill 103 would split the annual draw from permanent fund earnings evenly between dividends and state government.
A law passed last year, Senate Bill 26, bases the annual draw on 5.25% of the permanent fund’s average value over the previous five years, going down to 5% in two years.
If adopted, the bill would leave an $860 million gap between how much the state spends and what it raises.
Wasilla Republican Sen. David Wilson said he would like to see a public vote on the change before it goes into effect.
“Something of this magnitude of a change should go to a vote of the folks, of Alaskans,” Wilson said.
Anchorage Democratic Sen. Bill Wielechowski expressed concern over a provision that said the Legislature “may” appropriate money to the dividend, rather than saying it “shall” appropriate the money. He also said a statewide vote is needed.
“I think if we’re going to make a change of this magnitude, it should be in the (state) constitution,” he said.
The committee voted 5-1 to advance the bill, with Wielechowski the only vote against it.
A law passed in 1982 set dividends based on half of average fund earnings over the previous five years.
But the state government hasn’t followed the formula over the past three years. Gov. Bill Walker vetoed half of the PFD money in 2016. Then the Legislature reduced dividends the last two years.
This year, the dividend would be roughly $3,000 if the state follows the 1982 law. It would be roughly $2,300 if the bill to split the draw passes. Both amounts are significantly higher than last year’s $1,600 dividend.
The bill has been referred to the Senate Rules Committee. From there, it would go to a vote by the entire Senate.