The Alaska legislature has just a few days remaining in the 30-day special session called by Governor Mike Dunleavy.
Much of the time has been spent on trying to figure out what the state should do with the Permanent Fund Dividend. And at this point, it is anyone’s guess what could happen with this year’s PFD checks.
Governor Mike Dunleavy ran his campaign with a promise to bring back the full PFD. He has said that since the voters elected him on that promise, then that is the will of the people regarding PFD distribution. He has held firm and not waivered once in his decision to fund the full amount.
The reason the $3,000 figure is bounced around so much is because that is roughly the amount Alaskans are due this year. That ‘statutory amount’ is determined by a state formula set back in the early 1980s that’s based on five-year average of the Permanent Fund earnings. When the stock market has a series of high years, PFD checks go up. Conversely, when the market falls for extended periods, check amounts go down.
The problem, says Kodiak Senator Gary Stevens, and many other legislators, is that passing out that big of a check right now could seriously hamper efforts to adequately fund state operations.
“The difficulty with that, the $3,000 is that it’s $2 billion. Each year we give a $3,000 dividend it would be $2 billion out of the treasury.”
Kodiak Representative Louise Stutes described the effect on the budget as a massive hole.
“ It leaves a huge hole in our budget. A $3,000 PFD would leave a $1.2 billion hole in the budget that has to be filled somehow.”
In addition, with fewer oil dollars coming into the state’s treasury, pulling $2 billion out can result in big cuts, as evidenced by Gov. Dunleavy’s proposed budget. And while many argue the state needs to keep cutting the budget, others have called the cuts draconian and too deep.
“And as you know, when the governor proposed his budget to give a $3,000 dividend, then he went to the next step of cutting the budget for every agency in the state. His budget would cut K-12 education by 25-percent, $1,000 less for every kid in the school district, the university would be cut by 41-percent, and then the health and social services would be cut by some 35-percent. So it was just an enormous cut that would have repercussions across the entire state.”
In a statement posted on the governor’s website he encouraged legislators to ‘follow the law’ regarding the PFD and approve the full amount.