With a chance of supersized dividend checks, legislators have begun exploring the possibility of splitting up the October lump-sum payment into four smaller checks paid out quarterly.
Just don’t expect to see the change this year.
The House State Affairs Committee took up House Bill 132 in a Saturday session where its sponsor Rep. Jonathan Kreiss-Tomkins said he’s not in a hurry to move the bill with less than a week remaining in session.
The concept was sparked by former state lawmaker Clem Tillion and has seen traction in the Senate, where it was paired along with movement of a proposal to put the dividend in the constitution. In the Senate, the proposal has been pitched to spread out the economic impact of the dividend and, with smaller payments, potentially keep more of the money in state and out of big, splurge-y purchases.
The discussion in the House on Saturday was more mixed.
Universal basic income and heating fuel
The committee heard from Sidhya Balakrishnan, a researcher with the Jain Family Institute, about her research on universal basic income.
She noted that Alaska’s PFD sizes fall short of qualifying as universal basic income, which is a specific policy goal aimed at guaranteeing everyone a basic quality of life. She did say that regular payments would go some of the way to meeting that objective.
The committee also heard from Department of Revenue Bruce Tangeman, who raised some practical issues with the payment. He said under quarterly payments, the state would be making somewhere in the neighborhood of 2.5 million payments every year. He also noted that the historical reasoning behind a single large payment in the fall is that’s when many Alaskans are filling up their heating fuel tanks for the winter.
The discussion also recognized that the quarterly payments are largely driven by the hope of supersized dividends that would yield quarterly payments in excess of $700. Historical dividend amounts, though, would net Alaskans quarterly payments in the $200 to $400 range, a sum most members seems to recognize as less meaningful.
It left members like Rep. Adam Wool, D-Fairbanks, unclear about the direction of the measure. While he expressed support for curbing some of the bad behavior—like the minor uptick in crime around PFD time found in a recent study—he wasn’t sold that quarterly payments would be the solution.
“What is the goal of having quarterly payments?” he asked near the end of the meeting.
Kreiss-Tomkins acknowledged that there are many unanswered questions about the quarterly payments, and he said he’s intent on having the discussion.
“As the sponsor of the bill, there’s not so much a predestined goal that I have for the legislation. Unlike most of the bills that come through this committee, I’m not raring to move this through. It’s not predetermined in my own mind that quarterly disbursements are necessarily good public policy given the amount or the size of the dividend at present,” he said. “However, I feel like I have a lot to learn about it and there’s a lot of questions, some which I think we’ve bookmarked today. This is truly a vehicle for conversation and inquiry.”
Other PFD legislation
The committee also heard Rep. Adam Wool’s House Bill 132, which would tie the size of the dividend to oil income instead of the investment returns of the Alaska Permanent Fund. An amendment by Rep. Zack Fields would have increased the portion of oil revenue that goes to dividends to 40 percent, which Wool said would have put the dividend in the range of $1,400 to $1,500.
The legislation was held.