Alaska Gov. Mike Dunleavy speaks during a news conference on Wednesday, May 12, 2021, in Juneau, Alaska, with a number of state legislators around him. Dunleavy discussed a proposed constitutional amendment dealing with the Alaska Permanent Fund and the Permanent Fund dividend. (AP Photo/Becky Bohrer)

Alaska Gov. Mike Dunleavy speaks during a news conference on Wednesday, May 12, 2021, in Juneau, Alaska, with a number of state legislators around him. Dunleavy discussed a proposed constitutional amendment dealing with the Alaska Permanent Fund and the Permanent Fund dividend. (AP Photo/Becky Bohrer)

Dunleavy proposes new changes to Permanent Fund

The changes are an amendment to updates he proposed earlier this year.

Gov. Mike Dunleavy announced during a press conference with state lawmakers on Wednesday new changes to a constitutional amendment to the Alaska Permanent Fund.

The changes, which amend adjustments to the fund that he introduced earlier this year, include putting the PFD formula into the Alaska Constitution and establishing that formula as a 50/50 split of revenue between PFD payments and state services. The changes would also deposit Power Cost Equalization endowment revenue into the Permanent Fund’s principal balance, meaning it could not be spent by the Legislature for other uses.

Dunleavy said Wednesday that there is “a chance” that the Legislature will be called back for a special session later in the year, during which they could address federal funds coming into Alaska via the American Rescue Plan as well as further PFD legislation.

Several lawmakers who joined Dunleavy during Wednesday’s press conference praised the changes as a good “first step,” in addressing gaps in Alaska’s finances, including Sen. Peter Micciche, R-Soldotna, who also serves as Senate president.

“This isn’t a partisan issue. It’s not a ‘which body you’re in’ issue, or whether or not you’re in the executive branch,” Micciche said. “We need to come together as Alaskans because until we solve a fiscal plan beginning with a Permanent Fund dividend solution, we are stuck in neutral. This is a clutch that will allow us to put the vehicle in gear and move to the next step.”

Rep. Ben Carpenter, R-Nikiski, thanked Dunleavy for his “leadership” on the issue and said that one of the reasons he sought a seat in the Legislature was to help address Alaska’s financial issues.

“It’s been frustrating over time knowing that we keep kicking the can down the road,” Carpenter said. “So this right here is what not kicking the can anymore looks like. I’ve been saying for a number of months now that we’ve got to address a political problem, not just a fiscal problem.”

Because the legislation would amend the Alaska Constitution, it would need to pass with a two-thirds majority in both the Alaska House and the Alaska Senate before ultimately appearing on Alaskans’ ballots in the November 2022 general election.

The Permanent Fund was created through an amendment to the Alaska Constitution in 1976 by voters, who wanted to put at least 25% of money generated from anticipated revenue from the trans-Alaska pipeline into a dedicated fund. That’s according to the Alaska Permanent Fund Corporation (APFC), which was created in 1980 by the Alaska Legislature to invest and manage the assets of the Permanent Fund.

The Permanent Fund is divided into parts. The nonspendable principal balance can only be used for investments that produce income, per the Alaska Constitution, while the spendable Earnings Reserve Account is available for appropriation, per Alaska State Statute. APFC is responsible for investing the Permanent Fund’s principal balance, while the Alaska Department of Revenue’s Permanent Fund Dividend Division determines the eligibility of people who apply to receive an annual payment that comes from the investment earnings of mineral royalties.

As of March 31, the total value of the Alaska Permanent Fund was $76,320,600,000, including about $59 billion in the principal balance and about $17.3 billion in the Earnings Reserve Account.

Dunleavy’s full press conference can be viewed on his Facebook page.

Reach reporter Ashlyn O’Hara at ashlyn.ohara@peninsulaclarion.com.

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