Senators propose changing PFD calculation, imposing a spending cap

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JUNEAU, Alaska (KTUU) — Two bills were introduced Friday that would change how the Permanent Fund Dividend is calculated and impose a spending cap on lawmakers.

Co-chairs of the Senate Finance Committee, Sens. Natasha von Imhof, R-Anchorage, and Bert Stedman, R-Sitka, say they introduced the legislation as means to start the debate.

As currently written, Senate Bill 103 would see a 50-50 split between dividends and state expenses taken from a draw of the Earnings Reserve Account.

In 2018, the Legislature passed Senate Bill 26, which established an annual draw from the Permanent Fund to pay for state services. The 5.25% draw of the fund’s market value did not detail what percentage would go toward a Permanent Fund Dividend payouts.

Senate Bill 104 would impose a spending cap on the Legislature at $5 billion for FY2021, allowing for a growth rate based on inflation over the past five years.

Both bills mirror constitutional amendments proposed by the governor earlier in the session.

Stedman said the advantage of a statutory approach is they have a better chance of “getting over the finish line.” Von Imhof said using statute would allow lawmakers “to test the waters” with the proposed changes.

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