Senate’s $1,000 COVID-19 dividend would leave out first-time PFD applicants

Something might be going on in there.The Alaska State Capitol building as photographed in 2010. (Photo by Kimberly Vardeman/Creative Commons)

After hours of debate on whether to include a second cash payout to Alaskans to ease the economic pain of the COVID-19 pandemic, the Senate approved an operating budget containing two $1,000 PFDs with one coming in the spring and another coming in the fall.

The plan, which many senators termed a COVID-19 relief payment or economic stimulus, will need to be approved by the House and Gov. Mike Dunleavy before it becomes a reality, but as currently written it will not be going to first-time applicants for the PFD.

The amendment is written so the payment will go to “each eligible individual who received a 2019 permanent fund dividend” and would go out as soon as the budget goes into effect.

That means the payment won’t go to anyone who didn’t live in Alaska for the full 2018 calendar year, including people who are applying for the first time after living in Alaska for the full 2019 calendar year. There are also no eligibility tests attached to the payout and it could also potentially go to people who’ve recently moved away from the state.

Historical numbers for how many of the more than 650,000 PFD recipients are applying for the first time is not immediately clear. The numbers are not regularly included the annual reports published by the Alaska Permanent Fund Division, but the report covering the 2013 calendar year showed there were 32,203 first-time applicants that year, of which 9,355 were babies born during the qualifying year.

The eligibility issue wasn’t a main issue during the debate, but Sen. David Wilson said during the debate on a $1,300 payout that it was “the broadest net we can cast.”

The debate largely focused on the balance between preserving the state’s resources for what could be many months of hardship versus easing the economic pain in the near-term.

“In any other situation, I wouldn’t support a $1,300 permanent fund dividend at this time,” said Sen. Elvi Gray-Jackson, D-Anchorage, on the rejected $1,300 proposal. “These are not normal times. The economic and health challenges that Alaska and the entire world is facing justifies this measure. So many of my constituents work in these fields. They don’t know how to pay next month’s rent or how to work diapers for their newborns, food for their family, medical supplies.”

Many legislators voted out of concern that Congressional relief efforts would be stymied in partisan D.C. gridlock and said Alaska can’t wait for the help to come.

Several legislators opposed the payout, arguing that it wasn’t the best and most effective use of the state’s resources. Sen. Jesse Kiehl, D-Juneau, argued that the payment would only cover perhaps a few weeks of lost wages for affected Alaskans.

“The right way to help Alaskans instead of a little ripple everywhere is a wave for those who are truly in need,” he said. “We need to replace wages where people aren’t working, where income isn’t coming in. Two weeks’ worth isn’t going to carry through you as long as this lasts.”

Sen. Bert Stedman, R-Sitka, argued that it should go to the people who need it most and not to people who are riding out the pandemic while grilling prime rib on the spit.

“We have a limited amount of funds. We need to be targeted in how we allocate them,” he said. “So, we don’t see a COVID-19 virus flying by like a flock of ducks and we grab our 12-gauge and just shoot in the air and hope something falls out. We need to pick and choose and target. Aim once.”

He also noted that this payment isn’t needed by him or many of the other legislators, who haven’t seen their income dry up. He worried that much of the payment would go to people who don’t need it.

“Let’s be measured in our approach and very careful with the funds we have left so they go to the needy and not the bloated or the greedy,” he said.

The estimated cost of the additional dividend is about $680 million.

Sen. Shelley Hughes, R-Palmer, has been an outspoken advocate for the full PFD long before the COVID-19 pandemic and said that she believed the wealthy would turn down the payment if given the chance.

“I believe in the goodness of Alaskans,” she said, “That the $100 million to the wealthy would not go out because they would turn it down.”

Also in the budget

The operating budget passed by the Senate also includes some portions of the capital budget along with $30 million in additional funding for K-12 schools, $75 million to continue the fight against COVID-19 and some additional funding for the University of Alaska beyond the agreement Gov. Dunleavy signed with the UA Board of Regents.

Concurrence on the budget has already been rejected by House, which passed a budget without any dividend, to send it to conference committee to hash out the differences. The first meeting could be held as early as today.

Other news

  • The Legislature has passed House Bill 308, which eases access to the state’s unemployment insurance system. As noted by many legislators, Alaska’s unemployment benefits rank dead last in the U.S. in terms of wage replacement. The legislation doesn’t touch the base rate, but it does significantly boost the amount recipients can receive for dependents and removes the cap.
  • The House Labor and Commerce Committee is moving ahead with its second significant bill dealing with the economic impacts of COVID-19. House Bill 310 would delay foreclosures and disconnects from utilities. The measure wouldn’t forgive the debt, according to a report by KINY, but give Alaskans more time to pay their bills.
  • The state is up to 36 after four additional travel-related cases were reported on Monday. Chief Medical Officer Dr. Anne Zink noted, however, that four of the cases announced on Sunday have no clear source and are considered to be from dreaded “community spread.”
  • Gov. Mike Dunleavy has also ordered that anyone flying into Alaska MUST self-quarantine for 14 days. The failure to follow this order could result in a fine of up to $25,000 or jail time.

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