JUNEAU, Alaska (AP) — A legislative panel has failed to reach an agreement on potential changes to the Alaska Permanent Fund dividend, leaving lawmakers with little guidance on a path forward on the thorny subject.
The state has struggled to address a long-running deficit. It has drawn down savings accounts and in 2018 began using fund earnings, traditionally used to pay dividends to residents, to also help cover government expenses.
The Bicameral Permanent Fund Working Group’s only recommendation was that the Legislature should not violate a 2018 law that sought to limit what could be withdrawn from Alaska Permanent Fund earnings for dividends and government expenses.
“We were able to establish and recommend that the Permanent Fund should be protected from inflation and the Legislature should not utilize more of the earnings reserve” than is outlined in the law limiting the draw to roughly 5% of the fund’s overall market value, House Finance Committee Co-chair and Republican Jennifer Johnston told KTOO-FM.
Republican Sen. Shelley Hughes is concerned that the the law limiting the draw will not limit spending from the fund’s earnings reserve, since the Legislature has previously chosen not to follow the 1982 dividend formula law and can do so again, she said. The formula, which Dunleavy has argued should be followed until it’s changed, has not been followed in recent years, amid the deficit battle. Dunleavy’s budget proposal for the upcoming year, which would pay a dividend under the formula, also would use $1.5 billion from savings.
The working group decided Monday against a specific change to the formula for setting Permanent Fund dividends.
The eight-member legislative panel was created last year to provide policy recommendations on the fund.
“It was my perspective that our scope of work was somewhat restrained, so it never felt that we never threw ourselves headlong into looking at new dividend formulas,” Democratic Rep. Jonathan Kreiss-Tomkins said, adding the group’s work was not a failure.
This story has been corrected to remove erroneous reference to $1.5 million deficit.