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Econ 919 — Passing a PFD

Photo: KTOO file photo

Alaskans can expect their Permanent Fund Dividend checks in mid-October. The Legislature signed off on $1,100 PFDs this week.

It was a scramble to get the PFD plan across the finish line in the final hours of the Legislature’s third special session.

“You know, it’s interesting because it’s starting to feel like that often down in Juneau,” said Soldotna Republican Sen. Peter Micciche. “Being the third special session, of course, we’ve had that last-day feeling three times.”

This year — like many years before it — the Legislature came close to shutting down, with matters like the size of the PFD hamstringing progress on a budget. 

The budget ultimately did pass, in June. But Dunleavy vetoed the proposed PFD funding, saying it was insufficient. He convened special sessions so the Legislature could work it out.

The House ultimately came up with a $1,100 dividend. And as the clock ran out on the third special session, the Senate had no choice but to pass that proposal. Not doing so would have meant a $0 dividend.

In the final hours of the session, the Senate also briefly considered Senate Bill 53.

The bill proposes eventually reaching a formula in which half of the annual withdrawal from the permanent fund would go to the PFD. The other half would go to government services.

The split outlined in SB53 would be conditional on the state adding $700 million in new taxes or other revenue. 

Gov. Mike Dunleavy first proposed a 50-50 split earlier this summer, on different terms. He wanted that formula to be put in a constitutional amendment.

Micciche said he supports the Senate bill.

“If we’re going to solve the long-term fiscal issues in our state — I mean, this is year six, and it took 15 years to get to the beginning of year six — then we’re going to have to be more than willing to compromise,” he said.

The bill did not advance. And as it stands, the Legislature’s long-term budget woes are still far from solved.

A group of eight Alaska lawmakers from each of the four caucuses met this summer to chip away at those problems.

The group came up with a broad list of recommendations, released in a final report. They include implementing a PFD formula based on the value of the permanent fund, pursuing spending cap reform and having a “‘transition period’ with one-time fiscal measures” over the course of several years.

Micciche said he’s hopeful the group could be a microcosm of cooperation amongst the larger body. 

“Those folks don’t hang out in the evenings,” he said. “They don’t spend the weekends together. So if those eight can come together — maybe not on the perfect solution, because there is not a perfect solution, but a menu of options — then the Legislature must be able to do the same. And I have hope that we can.”

Lawmakers would be wise to not fully unpack their bags just yet.

Dunleavy said he's convening a fourth session next month to hammer out a long-term fiscal plan. And even though he didn’t veto the $1,100 PFD, he said he’d like to see the Legislature pass “the rest of this year’s PFD.” In August, Dunleavy proposed a PFD of $2,350.

Regardless of the size of the dividend, there are hundreds of Alaska nonprofits that look forward to its arrival every year.  

The Kenai Peninsula Food Bank averages over $15,000 annually from Pick. Click. Give. program, which allows Alaskans to donate part of their PFDs to charities around the state. 

“The Pick. Click. Give. donations have a huge impact on the Kenai Peninsula Food Bank's ability to provide food to the Kenai Peninsula,” said Donor Relations Specialist Randi Smith.

Smith said it could be particularly important when other fundraisers are canceled or curtailed. This year, the food bank put its Soup Supper online.

“We have amazing donors who hang with us through thick and thin,” Smith said. “But, of course, we don’t have the bidding traffic we normally would’ve had.”

Smith said the Food Bank got over $16,000 from Pick. Click. Give. last year.

As for how Micciche spends his own PFD:

“I know exactly what I do,” he said. “I’ve never seen one of them.”

Like many Alaskans, he sends his straight to the bank.

The PFD Division estimates it will have payments distributed within 30 days.

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