Alaskans would receive a full dividend from the state’s oil-wealth fund this year under a bill introduced Wednesday in the House. But the full payout would come with a catch.
The House Finance Committee bill also seeks changes to the dividend formula going forward, committee co-chair Tammie Wilson said. The North Pole Republican told reporters she wants a dividend calculation in law that legislators follow.
The current dividend calculation hasn’t been followed the last three years amid an ongoing budget deficit, and dividend payouts have been reduced.
Gov. Mike Dunleavy has called for a full dividend and said that voters should have a say on any changes to the dividend program.
The bill comes a week into a special session with no apparent progress toward finalizing a state budget. A major stumbling block has been disagreement over what to do with the dividend, which is paid using Alaska Permanent Fund earnings.
House Speaker Bryce Edgmon, a Dillingham independent, called the bill a creative approach in trying to reach a resolution. But he said it needs to be vetted and support for it gauged.
Members of his bipartisan majority caucus have questioned the sustainability of the current dividend calculation. Edgmon said he expects “robust” discussion on support of a full dividend, estimated to be around $3,000 this year.
But he said there’s also the reality that lawmakers need to finish their work and Dunleavy’s insistence on a full dividend.
For years, dividends were paid to qualified residents without a hitch. But in 2016, then-Gov. Bill Walker limited the amount available for dividends as lawmakers grappled with how best to tackle the deficit. Lawmakers the next two years set capped amounts.
Last year, lawmakers began using permanent fund earnings to help pay for government costs, heightening tensions with the dividend. They also last year sought to limit how much could be withdrawn from fund earnings for government and dividends.
Alaska has long relied on oil revenues and has used savings to get by amid low to middling oil prices the last few years. Alaska has no statewide sales or personal income tax. No new taxes have been seriously discussed this year.
Edgmon said if anyone has an expectation of a $3,000 dividend beyond this year that expectation comes with “tremendous reductions in public services” and “sort of the retooling of Alaska as we know it today.”
Senate President Cathy Giessel, an Anchorage Republican, said the Senate will watch the House’s deliberations on the bill. The Senate, in its version of the budget, included a full dividend.
Giessel told reporters members of her Republican-led caucus have indicated they are willing to support a full dividend this year if “we can prudently address what that quantity would be going forward.”
“What it looks like in the future, of course, is the main issue,” she said.
• This is an Associated Press report by Becky Bohrer.