Tentative plan: $1,605 PFD now, $1,400 later & changing the formula forever

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ANCHORAGE (KTUU) - A tentative plan is being discussed among Alaska lawmakers that would see a $1,605 Permanent Fund dividend appropriated now with a $1,400 supplemental payment approved later in the year.

The $3,000 PFD would be contingent on the statutory formula that calculates the dividend being changed by lawmakers.

Many lawmakers in both the House and Senate believe the current formula is unsustainable and that following it would drain the Earnings Reserve Account (ERA), the roughly $14 billion account that collects earnings from the Permanent Fund.

The ERA is typically used to pay out the annual dividend.

Some legislators believe the decades-old formula should be followed and added to the Alaska Constitution.

House Speaker Bryce Edgmon, I-Dillingham, confirmed the proposal of two payments and that the formula change is being discussed as the governor “won’t budge” from his pledge to deliver a full statutory dividend.

Edgmon described it as a “heavy lift” to get lawmakers to agree to overdraw from the ERA and pay out a $3,000 PFD in 2019. He said it may be possible if a long-term sustainable dividend could be devised.

A separate special session would be needed, Edgmon said, as changing the statutory formula is “a big topic and it would take us time and a lot of effort to achieve.”

Despite that, Edgmon said the House majority has asked the governor’s office repeatedly to add the statutory formula to the call of the ongoing special session.

Rep. Tammie Wilson, R-North Pole, who now caucuses with the House minority, said the Legislature should “absolutely” debate the statutory formula and she agreed with Edgmon that it should be debated now.

She has advocated for a 50-50 plan: 50% of the Permanent Fund’s earnings drawn every year by the Legislature would go to state services and 50% would go to the Permanent Fund dividend.

“If they want to change the law, they should work at changing the law,” said Gov. Mike Dunleavy during an interview with Channel 2 on Thursday. He has repeatedly said a statewide vote of the people should be required before the formula is changed.

The governor’s office did not respond to a request for comment before deadline as to why the PFD formula has not been added to the call.

On the plans for the dividend generally, a spokesperson for the Senate majority said “conversations are ongoing with the governor and fellow legislators.” Senate Minority Leader Tom Begich, D-Anchorage, knew about the formative proposal and was receptive to the idea.

"I would be supportive of a $1600 payment now and a $1400 payment in the spring, as some have discussed, if there was a long-term change to the statute to ensure a sustainable dividend in the future, and restoration of the bulk of Governor Dunleavy’s recent devastating vetoes,” he said in a prepared statement.

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