Alaska Senate fails to revive oil-wealth fund dividend bill
JUNEAU, Alaska (AP) — The Alaska Senate failed Monday to revive a bill that would pay residents a full dividend of about $3,000 from the state’s oil-wealth fund this year, a sign of the struggle lawmakers are having in reaching agreement on one of the special session’s last issues.
Instead, senators narrowly voted to create a working group with the House to make recommendations on future use of Alaska Permanent Fund earnings. The House approved the measure Sunday.
Some suggested existing committees could buckle down on the issue and questioned whether the group’s findings would sway any hard-held positions. But Senate Finance Committee co-chair Natasha von Imhof said a fresh approach is needed.
“We’re all tired, and it is time to get a new perspective,” the Anchorage Republican said on the floor.
Legislative leaders have made clear their intentions to pay an Alaska Permanent Fund dividend this year. What that amount ultimately is remains to be seen, though Republican Gov. Mike Dunleavy has been firm in calling for a full payout.
The Legislature has been meeting in regular and special sessions since mid-January, and the dividend has been a dominant issue. Division over the dividend snarled efforts to finalize a state operating budget, prompting lawmakers to separate the two in an effort to speed the budget’s passage. The House approved the budget Sunday and the Senate approved it Monday, three weeks before the start of the fiscal year. Dunleavy, who has veto powers, told reporters last week he believes the budget needs to be smaller.
Senate Finance Committee Co-chair Bert Stedman said it’s unlikely the dividend question will be resolved by Friday. “Very, very, very, very unlikely,” the Sitka Republican said. Special sessions can last 30 days, and that limit would be hit Friday.
Senators deadlocked 10-10 Monday on a vote to rescind their action last week, when they voted down the full payout. A vote to create the working group followed later in the day.
The permanent fund is a nest-egg of sorts, seeded with oil money and grown over time through investments. Its overall value, at the end of April, was $65 billion. That includes the earnings reserve, which was valued at $19 billion. Fund earnings traditionally have been used to pay the annual dividend to qualified residents.
Dunleavy has said lawmakers should follow a longstanding formula and pay a full dividend; that was one of his top campaign pledges last year. He also has said the formula should not be changed without a vote of the people.
Some legislators agree with Dunleavy’s position. There also are legislators who argue the formula is unsustainable and at odds with a law passed last year that seeks to limit what can be spent from fund earnings for dividends and government. That limit for the upcoming fiscal year is $2.9 billion. A full dividend would cost an estimated $1.9 billion.
The newly passed budget seeks to sweep more than $10 billion from fund earnings to the fund’s principal, which has constitutional protections. Stedman said the move would not hinder the state’s ability to pay a dividend.
Dividends have been capped the last three years amid a budget deficit that has persisted amid low to middling oil prices. The size of checks distributed last year was $1,600, an amount settled on because it was what could pass the House at that time.
The state, which had long relied on oil revenues to help pay for expenses, has no personal income or statewide sales tax, and no such taxes have been discussed this year.
Last week, the full dividend payout fell one vote short of passage in the Senate, with a prominent supporter, Republican Sen. Mike Shower, absent. Shower has cited work obligations for his absence.
All senators were present Monday. Democratic Sen. Elvi Gray-Jackson of Anchorage, who last week voted for the bill to pay a full dividend, was among those who voted against bringing the issue back up.
“At this point, I just want us to work together to come to some consensus on behalf of our constituents,” she said, adding later: “Obviously, there’s division.”
Stedman said he thinks efforts will be made over the next few months to try to reach agreement on restructuring the formula. “But if that can’t be accomplished, we’re going to at least decide a dividend amount this year,” he said.