The biggest impact of Friday’s Alaska Supreme Court Permanent Fund dividend ruling won’t be on the way in which the Legislature or Governor operate — in fact, the court ruled that Gov. Bill Walker acted within his authority when he vetoed a portion of the funding allocated for PFD checks in 2016.
What the ruling will do is serve to clarify the public debate over use of Alaska Permanent Fund earnings, which has been muddied over the past few years by opinions being presented as legal facts.
In its ruling, the court concluded that the state constitutional amendment establishing the permanent fund does not allow the dedication of permanent fund income. The court also found that the Legislature’s use of permanent fund income is subject to normal appropriation and veto processes.
That certainly contradicts propositions being pushed by groups opposed to the use of Permanent Fund earnings to pay for state government. The ruling effectively debunks the idea that Alaskans have a constitutional right to an annual dividend. We are reliant upon our elected representatives doing their job in Juneau to fund the dividend program, in the same way that we expect them to fund education, public safety, fishery management, and every other government program.
So, what’s next?
State Sen. Bill Wielechowski, an Anchorage Democrat who along with two former state legislators filed the lawsuit, says the dividend program should be enshrined in the state constitution. Sen. Wielechowski has been flirting with a run for governor, but regardless of who is on the ballot, it will be a central campaign issue next fall.
However, we think that the framers of Alaska’s constitution knew what they were doing when they prohibited the dedication of funds to specific programs — state revenue, including Permanent Fund earnings, goes into the state’s general fund. And we think that had the authors of the constitutional amendment establishing the Permanent Fund intended to bypass the anti-dedication clause, they would have done so.
Candidates already have started to file paperwork to run next fall, but there’s one more legislative session on the calendar before the campaign rhetoric ramps up next summer. Lawmakers will be facing the same question they’ve failed to address for the past three years — how to address a multi-billion dollar deficit — and they’ll be doing so with fewer options as other state reserves have been effectively drained to cover previous years’ budgets.
Come January, lawmakers will find they have painted themselves into a corner when it comes to funding the budget, and will need to come up with a plan that includes use of Permanent Fund earnings. We’re sure to see some lawmakers trying to parlay a stance against any such plan into general election votes.
But, as the court ruled, allocating public funds is the job of the Legislature, and quite frankly, it’s long past time for lawmakers to stop shirking that responsibility.
Friday’s ruling should offer clarity and guidance for the Legislature in addressing the state deficit — and it removes an excuse for failing to do so.
