Oof, Senate Democrats are also displeased with this bill. They just sent out a press release with thoughts from Anchorage Democrat Bill Wielechowski, Juneau Democrat Jesse Kiehl and Anchorage Democrat Elvi Gray-Jackson.
Their criticisms are that this proposal draws too much from savings. People are all over the place on this one today.
Here’s Kiehl’s thought:
“Using the Higher Education Fund to pay a Permanent Fund Dividend doesn’t make sense. Raising more barriers to paying for college hurts the economy and limits opportunity. Our state needs a real plan that pays a sustainable dividend Alaskans can count on for the long-term. This falls short.”
“The Permanent Fund Dividend was established so Alaskans directly benefit from the subsurface resources we all collectively own. Severing the dividend from the Permanent Fund breaks the compact we have had with Alaskans for the last 37 years to share our resource wealth. Draining our state savings account and using funds designated to keep our best and brightest students here in Alaska just compounds this mistake.”
“It is wrong to take money from the Higher Education Fund that seeks to incentivize young Alaskans to work hard and achieve a post-secondary education. All members of the Senate Democrats support a constitutional amendment to guarantee a Permanent Fund Dividend. This is the only way we can protect a sustainable and meaningful dividend for future generations.”
The governor has responded, and he is not happy.
“This bill kills the Permanent Fund Dividend as we know it. The PFD is your share of Alaska’s mineral wealth, and there should be no change to the dividend without a vote of the people,” Dunleavy says in a statement released a moment ago. “That’s what I promised on the campaign and that’s the promise I intend to keep. I cannot and will not support this legislation.”
Dunleavy’s statement goes on to say that this bill basically ignores the state’s statutory formula, which would result in a $3,000 dividend. And he’s not subtle about what this will do if it gets to his desk.
“If passed, I will veto SB 1002. I encourage an amendment that would restore a full PFD to the people. Follow the law — that’s what Alaskans have demanded and deserve,” Dunleavy said in the statement.
The Senate introduced the bill on the floor and quickly adjourned. They’ll be able to vote on it tomorrow. That session is scheduled for 9 a.m.
Whoa. As soon as the senators here finish signing, the electronic bells ring through the building, announcing that the Senate is ready to take the floor. A floor session usually starts about 15 minutes after the bells ring.
This will go to the floor. None of the members of this committee object to moving this bill out of committee. They’re signing it now.
Coghill’s taking an optimistic bent to this. He says this is actually a good problem to have where they’re deciding how generous they can afford to be to Alaskans.
“I think the people of Alaska understand that we have wrestled with it as much as they have,” Coghill says.
Giessel makes an interesting comparison. She says the Legislature is practically the board of directors for the state. A board of directors would take numerous factors into account as part of its fiduciary responsibility to shareholders, she says.
Von Imhof gets fired up about the dividend. She says she believes the state can realistically afford a dividend of closer to $1,000 with a “skinny” capital budget. She says large PFDs inch us closer and closer to an income tax in Alaska as the state drains its savings.
Costello, the Senate majority leader, says that if/when this bill goes through the Senate Rules Committee, it will go to the Senate floor. She says she believes that will happen this week.
Kawasaki asks Stedman why he settled on $1,600.
“It does match last year’s number,” Stedman says, “and it’s within fiscal reach of the appropriations.”
Stedman reminds people that the operating budget is pulling about $4.4 billion from the state’s general fund. This is an additional billion dollars.
Stedman wraps up his comments. Coghill speaks first, saying that because the Legislature is in special session and the governor did not specifically request that the Legislature set up a formula for the PFD. Constitutionally, the Legislature can only deal with what the governor specifically requested.
“The next best thing is how to create a sustainable dividend and I see this as one of the better ways,” Coghill says.
Stedman says the higher education fund has more than $300 million in it.
“There’s no reason to be alarmed that we’re going to make a huge structural change in the next year or two,” Stedman says.
All of this totals about $1,072,000,000, Stedman says.
The bill takes $770 million from the general fund, $172 million from the budget reserve fund (and Stedman says this will essentially drain that fund), and between $128 million and $148 million from the Alaska higher education investment fund.
Stedman says it’s not possible to exactly determine the amount, because they don’t know how many people apply.
Stedman then moves on to talk about where the money is coming from.
“It doesn’t fall out of the sky like rain in Juneau today,” Stedman says.
“It is a huge impact,” Stedman says, adding that paying for this dividend costs almost as much as funding K-12 education throughout the state.
Sen. Bert Stedman, R-Sitka, is explaining the bill. He says it’s fairly straightforward.
The Senate Rules Committee is meeting. That’s Sens. John Coghill (the chair), Scott Kawasaki, Cathy Giessel, Mia Costello, Natasha von Imhof and Tom Begich. All are physically present except Begich.
Welcome back to the Capitol Live. It’s been a while. Special session has been moving slowly.
On the floor of the Alaska Senate just a moment ago, Senate Bill 1002 was introduced. The bill proposes a $1,600 Permanent Fund Dividend. It’s been widely reported that members of the Senate Majority are split on a $1,600 PFD versus a full $3,000 PFD.
The Senate Rules Committee will take up this bill at its meeting at noon, according to the daily schedule. We’ll be there with updates.
You can read the bill below or you can go to the bill’s page on the Legislature’s website here.