Rep. Ben Carpenter, R-Nikiski, speaks Thursday, April 27, 2023, at a news conference in Juneau. (James Brooks/Alaska Beacon)

Rep. Ben Carpenter, R-Nikiski, speaks Thursday, April 27, 2023, at a news conference in Juneau. (James Brooks/Alaska Beacon)

Alaska House considers constitutional guarantee for Permanent Fund dividend

The Alaska House of Representatives will vote as soon as Friday morning on a constitutional amendment that would guarantee the annual Permanent Fund dividend.

The proposal, known as House Joint Resolution 7, calls for the dividend to be paid “by a formula set out in law.”

The formula currently in state law hasn’t been used since 2016 because legislators view it as unaffordable and annually pass budget laws to bypass it.

“We’re talking about a very long-term fiscal decision in this resolution,” said Rep. Alyse Galvin, I-Anchorage.

At present levels of services and revenue, the combination of the amendment and existing law would result in a dividend of about $3,500 per person but cost $2.3 billion and instantly create a $1.3 billion annual deficit, according to figures presented Thursday to the Senate Finance Committee.

Rep. Ben Carpenter, R-Nikiski and the author of HJR 7, has said that because the amendment would not take effect until 2026, the issue could be addressed before then. Other members of the House say they’re skeptical.

“If it’s so easy to change the dividend statute, why haven’t we done it?” said Rep. Cliff Groh, D-Anchorage.

The Alaska Senate approved a new dividend formula last year, but that concept was subsequently amended and has been in the House Finance Committee since May 2023. No dividend formula bill has been heard by a House committee this year.

Changing the formula would require 21 votes in the House and 11 in the Senate, plus the support of Gov. Mike Dunleavy.

Dunleavy supports the current formula and has become more aggressive about vetoing policy bills.

Amendments to Alaska’s Constitution require 27 votes in the state House and 14 in the state Senate, plus the support of a majority of voters in a statewide vote.

Carpenter has said he believes the amendment has enough votes in the House, but senators say it currently lacks the needed support in that half of the Legislature.

Carpenter was a member of a bipartisan, bicameral working group tasked with recommending a new structure for the state’s finances in the long term.

The group’s report, delivered in 2021, said that “constitutional certainty for the Permanent Fund dividend” was a necessary part of a comprehensive solution.

The Alaska Supreme Court ruled in 2017 that because the current dividend formula is in state law, the Alaska Legislature can bypass it with its annual budget law.

When two laws conflict, the newer law generally holds sway, and only the Alaska Constitution can constrain the Legislature’s ability to write the annual budget law.

In a lengthy series of debates on Thursday, members of the House considered — then rejected — several proposals to alter Carpenter’s amendment.

Among the rejected ideas were proposals to prohibit dividends for the unemployed and those earning more than $150,000 per year.

A proposal from Rep. Dan Ortiz, I-Ketchikan, would have put a dividend formula directly in the constitution, instead of leaving it up to state law.

But Ortiz’s proposal created a sliding scale of options for state legislators, rather than a firm payout, which meant that it would still leave the amount of the dividend up to annual debate. In part for that reason, his idea failed 10-30.

The House is scheduled to begin its floor debates at 10:30 a.m. Friday.

• James Brooks is a longtime Alaska reporter, having previously worked at the Anchorage Daily News, Juneau Empire, Kodiak Mirror and Fairbanks Daily News-Miner. This article originally appeared online at Alaska Beacon, an affiliate of States Newsroom, is an independent, nonpartisan news organization focused on connecting Alaskans to their state government.

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