Dunleavy urges lawmakers to act on PFD plan

Alaska Gov. Mike Dunleavy on Monday urged lawmakers to act on his proposal to place in the state constitution a new formula for the Permanent Fund dividend as the current special legislative session slumped along.

Mike Dunleavy speaks at a podium wearing a blue and black jacket and a face covering below his chin
Gov. Mike Dunleavy on June 30, 2020 (Photo from the Office of the Governor)

Some legislators have raised questions about some of the administration’s modeling assumptions and concerns with tackling the dividend issue without other pieces of a possible fiscal plan.

“It’s like whack-a-mole,” Dunleavy said in an interview with The Associated Press. “Every time we come up with a thing to move this along, it’s not enough for some people, and you start to become somewhat cynical. You start to say, ‘Well, wait a second. You’re moving the goal posts constantly to try and fix this issue.’”

“We have not decreed that they shouldn’t come forth with ideas,” he said later. “Let’s see what their ideas are.”

The Republican said if legislators want to discuss revenues, they can do so in August, when he has scheduled another special session. The agenda for that special session references “an act or acts relating to measures to increase state revenues,” and includes his proposed constitutional amendment that would put the establishment of new taxes to a public vote. He has unsuccessfully pushed a similar constitutional proposal the last two years.

Special sessions can last up to 30 days. That mark will be hit in the current special session on June 18. Dunleavy called this special session to finish the state budgets and consider his dividend proposal. The size of this year’s check is a point of contention in budget talks.

There is separate debate over his proposed constitutional amendment that would restructure the nest-egg permanent fund, rolling its spendable earnings reserve into the fund’s protected principal, and set a draw limit, with half the draw going toward dividends. Legislative leaders have tried to downplay expectations that agreement on a long-term dividend solution could be reached this special session.

A constitutional amendment would require two-thirds support in each the House and Senate to qualify for the November 2022 ballot. Dunleavy said he thinks he’s on the right side of the dividend issue.

“People would love an opportunity to go to the polls and be able to vote on something like this,” he said of his proposal.

A longstanding formula for calculating checks was last used in 2015 amid budget deficits. In 2018, lawmakers started using permanent fund earnings, long used for dividends, to also help pay government expenses and sought to limit withdrawal amounts for both purposes.

The Senate, in its version of the budget, included a dividend for this year estimated to be around $2,300. That is in line with a 50/50 split between what is drawn from earnings for government and dividends. The Senate proposal would exceed the withdrawal limit, something many legislators have expressed concern with. The House did not include a dividend in its version of the budget.

House and Senate negotiators are working to hash out budget differences.