Rep. Ben Carpenter (R- Nikiski) has introduced two constitutional amendment bills to guarantee that Alaskans are paid a Permanent Fund Dividend in accord with state statute rather than leaving the amount to lawmakers to debate each year.
HJR 7 would return the state to the historic method of determining payments based on statutory formula, a process used for nearly 35 years before Gov. Bill Walker vetoed a portion of the annual payment in 2016.
The Alaska Supreme Court upheld Walker’s decision, claiming that the dividends were subject to the annual appropriations process in the Legislature. Since that time, the statutory PFD payments have been drastically reduced.
“While the legislature could choose to follow the law and appropriate the dividend according to statute and separate it from the budget, they have not done so,” Carpenter explained in a sponsor statement about his bill. “Instead, the permanent fund dividend has been subjected to the budget process, where the dividend competes with government spending and often becomes the deficit reduction solution. “
If passed by the Legislature and approved by Alaskan voters, HJR 7 would require the state to pay the annual dividend in accord with state statute.
In this way, the people will always receive first call on the earnings of the Fund, ahead of government.
Rep. Ben Carpenter
“Neglecting to constitutionalize the PFD would permit lawmakers to continue avoiding their obligation to address the shortcomings of Alaska’s fiscal and economic planning, placing the Permanent Fund at risk,” Carpenter’s statement explained. “Constitutionally enshrining the Permanent Fund Dividend will provide for the maximum benefit of all Alaskans and ensure the prosperity of the Permanent Fund for generations of Alaskans to come.”
A second constitutional amendment introduced by Carpenter, HJR 8, looks to give Alaskans assurance that the PFD will be protected.
This bill would add protection against overspending of the Fund by moving the balance of the Earnings Reserve Account, which currently holds the Permanent Fund’s investment earnings, into the Fund corpus, where all future earnings will be retained and thereby safeguarded from access for government programs.
HJR8 then limits the permissible draw from the Fund to 5% of a five-year averaged market value of the Fund. The people would then be apportioned either 50% of the draw value or the amount of the historic calculation formula — whichever is greater.
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“In this way, the people will always receive first call on the earnings of the Fund, ahead of government,” Carpenter’s statement notes. “Failing to constitutionalize the PFD would enable a disproportionate distribution of Alaska’s oil wealth to growing government at the expense of Alaskan citizens.”
TAKING ACTION
The House Ways and Means Committee, which Carpenter chairs, plans to take up multiple PFD solutions in the coming days. The committee will take public testimony this Saturday, March 11, at 9 a.m., on the bills presented this week. To participate in the public hearing contact your local Legislative Information Office here.
