Alaska Senate narrowly fails to pass bill that would pay a $3,000 PFD

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ANCHORAGE (KTUU) - The Alaska Senate has failed to pass legislation that would deliver a roughly $3,000 Permanent Fund Dividend in 2019 to eligible Alaskans.

Ten members voted in support of the amended bill, falling one short of the majority needed to pass the legislation.

Sens. Tom Begich, D-Anchorage, and Mike Shower, R-Wasilla, were excused from a call of the Senate. Shower has been strident on social media in support of a full PFD and is expected to be back in Juneau on Friday.

The Senate could bring the bill back on the floor, rescind the earlier vote and allow Shower and Begich to vote. If members voted the same way, the bill would then have the required 11 votes needed for a majority, with Shower's vote.

Senate Bill 1002, introduced Monday morning, initially called for a $1,600 PFD, paid in part by dipping into two of the state’s savings accounts.

Gov. Mike Dunleavy has been vocal in his support of the full dividend and following the law that calculates the PFD. He threatened to veto SB 1002 if it passed with a $1,600 dividend.

An amendment was introduced Tuesday morning that would deliver a full statutory dividend in 2019. As written, the PFD would be paid for entirely from the Earnings Reserve Account (ERA), the account that collects earnings from the Permanent Fund.

The vote on that amendment passed 10-8 and split through party lines. Passing an amendment only requires a majority of the members present rather than a majority of the members of a chamber, which is required to pass the full bill.

On the Senate floor, members from across the aisle spoke passionately for and against the amendment.

Some cited the need to follow the PFD formula on the books that calculates the size of the dividend. Others said it was necessary to follow the rules-based system developed under Senate Bill 26, which determines how much of the Permanent Fund goes toward the dividend and how much goes toward state services.

Sen. Shelley Hughes, R-Palmer, introduced the amendment and said it was “the right thing” to give a $3,000 PFD to Alaskans and follow the traditional dividend formula.

Republican Sen. Bert Stedman from Sitka said that paying a full statutory dividend would overdraw from the ERA and that protecting the future Permanent Fund for future generations was his priority.

If the bill passed, he said that it would be necessary to work with members from the House to minimize an overdraw from the ERA and find alternative ways to fund the PFD.

Uncertainty over the future of the ERA is causing concern among those who manage the Permanent Fund, particularly in how the nearly $65 billion fund is invested.

Sen. Lora Reinbold, R-Eagle River, suggested the problem hinged on high government spending and that the budget needed to be reduced to afford a full dividend. Juneau Democratic Sen. Jesse Kiehl said using the Permanent Fund for government services meant all Alaskans received a share of the state’s oil wealth.

The Senate had previously approved an operating budget that contained a full PFD.

Some senators said at the time that the figure could still change when it was debated with members from the House.

Across the Legislature, members have said the formula that calculates the dividend needs to be changed. Some have said a vote of the people should be required before that occurs.

The governor has consistently agreed with the need to engage Alaskans. Both Dunleavy and Senate President Cathy Giessel, R-Anchorage, have suggested a special session may be required later in the year to debate the long-term future of the PFD.

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