PFD vote takes another option off the table

  • By Peninsula Clarion Editorial
  • Thursday, June 15, 2017 7:47pm
  • Opinion

We’d call it one step forward and two steps back, except we’re not sure there was a step forward in the first place.

On Wednesday, the Alaska House of Representatives voted to undo any progress being made toward a solution to the state’s fiscal woes by increasing the Permanent Fund Dividend to $2,200. Many House members — 26 of them, to be exact — have come to the conclusion that a long-term fiscal plan isn’t going to happen this session, and are abandoning their earlier measure to cap dividends at $1,250 and use some of the Permanent Fund’s earnings to pay for state government.

While the House’s action would also need to approved by the Senate and signed by Gov. Bill Walker — who, don’t forget, vetoed half the funding the Legislature had allocated for dividends in a failed effort to force lawmakers to come up with a solution last year — should Alaskans actually find themselves the recipients of a $2,200 PFD, we’d offer this advice: put it in the bank and make it last as long as possible, because you’re not going to see one like it again.

If lawmakers decide they’re hopelessly deadlocked, they can, with a two-thirds vote, draw on the Constitutional Budget Reserve for one more year to cover the cost of state government.

Then it’s all but gone, and the only pot of money big enough to cover a $3 billion hole will be the Permanent Fund earnings reserve — the same account from which money to pay dividends is allocated.

The Senate’s version of the budget also would use Permanent Fund earnings and does have a deficit, but if the Constitutional Budget Reserve is gone, that means either a greater draw on Permanent Fund earnings — and therefore, an even smaller dividend — or even deeper cuts to state services, which so many people advocate for but so few seem to be able to come up with ones we can live with.

The House plan includes an income tax, which the Senate will not pass. If the House continues to push that idea, we will find ourselves in the same position next year — with no Constitutional Budget Reserve to draw on — and again, we’ll be looking at the Permanent Fund earnings to cover the cost of government.

Both bodies agree that restructuring Permanent Fund to use earnings to pay for government is the biggest and most crucial part of fixing Alaska’s revenue stream. Yet, with the special session called by Gov. Walker ending today, it appears that we are no closer — not even one step — toward a solution.

So, when that check hits your bank account next fall, however big it is, savor it, because the current Legislature is leaving future ones with no other options.

More in Opinion

Peter Zuyus
What about Alaska’s seniors in the 2022 governor race?

When 130,000 seniors speak, candidates will listen.

This image available under the Creative Commons license shows the outline of the state of Alaska filled with the pattern of the state flag.
Opinion: Bringing broadband to all Alaskans

Too many Alaskans face barriers accessing the internet.

This photo shows a stack of pocket constitutions at the Alaska State Capitol. (Peter Segall / Juneau Empire File)
Opinion: Join us in voting against a constitutional convention

Voting no on a constitutional convention is vital to the well-being and stability of our state.

Michael O’Meara.
Point of View: Tell BOEM how you feel

It seems like BOEM should prioritize input from people most likely to be affected if leases are sold

The State of Alaska, Department of Administration, Office of Information Technology webpage. (Screenshot/
Cloud migration now underway will strengthen, enhance State IT systems

At the most basic level, cloud computing is the delivery of computing services remotely

Jessica Cook, left, and Les Gara stand in The Peninsula Clarion’s offices on Thursday, June 30, 2022, in Kenai, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
Alaska Voices: Better schools for a better economy

We need leaders who care about our children’s futures

A resident casts their vote in the regular municipal election Tuesday, Oct. 6, 2020, at the Kenai Peninsula Fairgrounds in Ninilchik, Alaska. (Photo by Megan Pacer/Homer News)
Voices of the Peninsula: This is our borough and city

By Therese Lewandowski Another election already? Yes! This is our local elections… Continue reading

The Alaska Permanent Fund Corporation building is seen in Juneau, Alaska, in March 2022. (Michael S. Lockett / Juneau Empire)
Opinion: APFC keeps steady keel during turbulent year

FY2022 was a challenging year for all investors

Homer Foundation
Point of View: Nonprofits provide essential services not provided by cities

By our count, nonprofits provide more than 100 jobs to our communities

Opinion: Don’t get scammed like I nearly did

I should have just turned off the computer.

Kenai Peninsula Borough Mayor Charlie Pierce campaigns for governor as he walks in the 65th annual Soldotna Progress Days Parade on Saturday, July 23, 2022 in Soldotna, Alaska. Pierce resigned as borough mayor effective Sept. 30, 2022, to focus on his gubernatorial campaign. (Ashlyn O’Hara/Peninsula Clarion)
Voices of the Peninsula: ‘It has been an honor to serve’

Borough mayor gives send-off ahead of departure