Legislature creates working group for future of PFD: ‘We’re stuck and we’ve gotta find a solution’

The Legislature signed off on an operating budget today that doesn’t include a line for this year’s permanent fund dividend.

Instead, amid deep political divides over this issue, the Legislature is punting the issue over to a newly formed 8-member working group to come up with recommended solutions through the impasse. The committee’s recommendations will be non-binding and require legislative action to be enacted.

The vote came hours after a proposal to pay out a $3,000 PFD according to the 40-year-old historical formula was killed in procedural vote that split the Senate evenly.

Sen. John Coghill, R-North Pole, carried the resolution to create the committee on the floor.

He said it’s an attempt to find resolution between competing interests: Those who want to follow the 40-year-historical formula even if it goes beyond the state’s budget and those who want to follow the 2018 law that set a limit on what could be spent out of the Alaska Permanent Fund.

“We’re stewards of the law. We’re stewards of the treasury. We’re stuck and we’ve gotta find a solution. This resolution is simply that. It’s solution-oriented methodology for us to work in a bicameral way to find a better way forward,” he said. “It is true that we’re struggling.”

The resolution originated in the House over the weekend. The House has had a slim-but-solid majority that supports a smaller PFD that’s within what the state can afford under the spending limits approved last year. The chamber has yet to put a specific number on its proposed PFD.

The House entertained an effort to pay out a larger PFD during the special session, but it would have relied on altering the 40-year-old dividend formula. Gov. Michael J. Dunleavy, whose campaign was almost singularly focused on a large cash payout to residents, vowed to veto such legislation. He said any changes must be put to a public vote.

It’s unclear what the working group will come up with, but a public vote is certainly one of the potential options.

Its main goal, as Coghill explained, will be to come up with suggestions for a durable solution to the problems at hand that can pass the Legislature.

“This group would be able to at least come in with things that they could lay on the desk, tell us the spreadsheets and look over the horizon as far as they can to say, ‘Here are the possibilities we think that are practical, economical and politically palatable,'” he said.

The working group has no timetable or deadline for its recommendations. Those recommendations would be non-binding and require the normal legislative process to be passed into law.

The Senate appointed Sens. Click Bishop, Shelley Hughes, Donny Olson and Bert Stedman to the committee. Bishop, a Fairbanks Republican who’s opposed the big spend it’d take for a $3,000 PFD, will chair the Senate side of the committee.

The House, which did not meet today, has yet to appoint its members.