By Andrew Kitchenman
Alaska Permanent Fund dividends will be delayed after the Legislature failed to agree on funding in time for the usual early October payments.
The House of Representatives plans to vote Tuesday on a bill that would pay dividends of up to $1,100. The House of Representatives defeated amendments on Monday that would have paid a PFD this year of roughly $2,350 or $3,800.
The state’s Permanent Fund Dividend Division said if dividends were to be paid as normal in the first week of October, lawmakers would have until Tuesday to decide on the amount. It is not possible for both chambers to pass the funding in time.
If the funding amount is finalized later, dividends would be paid roughly 30 days after that
The two sides of the PFD debate are split over which state law to follow. Most members of the Republican House minority say the state should pay dividends based on the formula of a 1982 law. But the mostly Democratic majority opposes drawing more from the permanent fund than is outlined in a 2018 law.
The state hasn’t paid a dividend that follows the formula since 2015, after oil prices fell. Supporters of the higher PFD amount say recent growth in the permanent fund means the state can afford it.
But opponents say drawing more than planned would threaten tens of billions of dollars of permanent fund earnings in the long term. They point to the state’s history of spending down savings.
Lawmakers have been debating the amount of the 2021 PFD for months.
In July, Dunleavy vetoed a $525 PFD, saying it was an insult to Alaskans.
Earlier this month, he added proposed $2,350 PFDs to the Legislature’s agenda for its third special session of the year.
House members also introduced bills on Monday that are intended to balance the state budget in the long term.
Rep. Geran Tarr, D-Anchorage, introduced bills to raise oil and gas taxes and introduce a 2% statewide sales tax.
The House Special Committee on Ways and Means introduced a bill to raise revenue by lowering the tax credits oil and gas companies receive. It also also introduced a bill that would change the formula in state law to pay permanent fund dividends. The PFD would equal 25% of the annual draw from the permanent fund. The current amount of the dividend under the new formula would be roughly $1,200.
The House is scheduled to resume its floor session Tuesday morning.