The same day a fractured Legislature met for separate special sessions in two different cities, lawmakers in Juneau made the case for a Permanent Fund “grand compromise.”
The special session didn’t convene until the afternoon, but the morning began with presentations by the Bicameral Permanent Fund Working Group. Group members were tasked with outlining the impact of a $3,000 Permanent Fund dividend, a $1,600 PFD and a $900 PFD.
Rep. Jonathan Kreiss-Tomkins, D-Sitka, who was present for the meeting, and Sen. Shelley Hughes, R-Palmer, who phoned in, were the duo tasked with addressing the $3,000 PFD, which is the sum favored by Gov. Mike Dunleavy.
“We agree that the permanent fund should be protected,” Kress-Tomkins said. “Both of us recommended a grand compromise.”
Hughes and Kreiss-Tomkins each said the Permanent Fund will not be sustainable without changes to the PFD size, state spending and revenues all need to be considered when reaching a solution.
They acknowledged they had differing opinions on which need to be prioritized but said they’re all a piece of the puzzle. Whatever solution is decided should be somehow cemented, possibly with a constitutional amendment, Hughes and Kreiss-Tomkins said, so that the annual “tug-of-war” is ended.
Sen. Bert Stedman, R-Sitka, and Rep. Kelly Merrick, R-Eagle River, who phoned in, presented the impacts of a surplus dividend, which is sometimes called a “leftover dividend.”
It’s a PFD calculated after appropriations have been made for the operating and capital budgets.
The report noted that while PFDs are definitely an important source of disposable income for Alaskans, King Economics speculates more than 90 percent of PFD distributions do not enter the state economy and are put toward college savings accounts, vacations, spent online or pay federal taxes.
Merrick said if a surplus dividend were adopted, she advocates for a spending cap to limit potential government growth.
Rep. Adam Wool, D-Fairbanks, presented on the possible impact of a $1,600 PFD. That’s about the size of last year’s PFD, which was noted in Wool’s report.
The presentation outlined six possible sources for funding a $1,600 PFD. These included: Permanent Fund earnings reserve account, the general fund, constitutional budget reserve, instituting a school head tax, abolishing oil tax credits and instituting income tax.
“There’s some common themes and common threads to all of these, so I think there’s some movement going forward,” said Sen. Click Bishop, R-Fairbanks, shortly before the meeting adjourned.
• Contact reporter Ben Hohenstatt at (907)523-2243 or firstname.lastname@example.org . Follow him on Twitter at @BenHohenstatt.