The House Finance Committee raised its proposal for the permanent fund dividend to sixteen hundred dollars.
A new version of a House Bill 2001 setting the dividend amount would also restore funding for most items vetoed by Governor Mike Dunleavy. But it would accept 89 million dollars in vetoes, including 20 million in cuts to the University of Alaska, a $49 million cut to school bond debt reimbursement and a $20 million cut to rural school construction.
“This was just trying to balance all of the different interests, of folks who wanted more cuts, folks who wanted a higher PFD, folks who didn’t want to go into savings,” Nome Democratic Representative Neal Foster said.
He noted that the measure relies on using all 172 million dollars in the Statutory Budget Reserve, a piggy bank the state has largely drained in recent years.
Wasilla Republican Representative Colleen Sullivan-Leonard said the state should use more permanent fund earnings to pay out the full amount of permanent fund dividends under the formula in a 1982 state law. That would be roughly $3,000 dollars.
“I just need to make this statement and ask how we’ve come to this decision of just not coming to the earnings reserve account to pay for a full statutory PFD?” Sullivan-Leonard said. “The funds are there. The funds are there to pay for general government. They’re there to pay for the disbursement of the statutory permanent fund.”
Paying the full PFD would require the state to violate a different law that limits the amount drawn from permanent fund earnings. Members of both legislative majority caucuses have expressed concern that violating that law would set a bad precedent. They said it would threaten the long-term sustainability of dividends, state services and the Alaska economy.
If the Legislature passes the bill without the full PFD, Dunleavy could veto it. He supports full dividends.