Dunleavy says it’ll be on PFD working group to prove changes are needed

Gov. Michael J. Dunleavy addresses the Permanent Fund Working Group on Wednesday, Jan. 19, 2019. (Photo by Matt Buxton/TMS)

ANCHORAGE—The bicameral working group tasked with generating recommendations for a way out of the impasse over the dividend opened its most substantive meeting today a rare scene: Testimony from Gov. Michael J. Dunleavy.

Governors typically steer clear of getting personally involved with the public legislative process but have appeared at critical times to make the case for signature legislation or priorities. Former Gov. Bill Walker met with legislators to talk about his fiscal plan and former Gov. Jay Hammond took the microphone in 1982 to talk about the PFD.

Dunleavy told the eight-member committee that as it begins its work reviewing the history of the Alaska Permanent Fund and considering its future, they need to keep the public engaged and informed about the decisions.

“I think it’s a worthy discussion, once again, as to where we’re gonna with the PFD and the earnings reserve of the permanent fund,” he said. “But we have to take into consideration what the people of Alaska want. … When it comes to something of this magnitude that’s been around for decades and it impacts literally every Alaskan, it behooves us to engage the people in a positive manner.”

Though whatever the committee produces will simply be a non-binding recommendation that would need to go through the normal legislative process and be signed into law by Dunleavy, the governor frequently raised the specter of a voter-initiated referendum that could repeal the work.

“We can’t get through this without working together, we know that, the Legislature can pass a bill, the governor can sign the bill or veto the bill … but in the end you can’t get anything done without the people of Alaska,” he said.

The working group did not ask Dunleavy questions before he left the meeting.

While many supporters of a full statutory PFD have acknowledged the need for change to the formula to protect the state’s financial future, Dunleavy said the committee will first need to prove that there’s a problem in the first place. He noted that the earnings reserve of the Alaska Permanent Fund sits around $19 billion (before paying for this year’s budget and this year’s dividend) and is expected to continue to grow.

“There are people who have said we can’t afford this going forward. I hope that’s what the group is going to do, try to make that case through facts and figures, charts and data so the people of Alaska can see if that’s the case,” Dunleavy told reporters after his testimony.

He reiterated a long-standing position that any changes to the PFD formula should be put to a vote of the people.

“I have a lot of faith in the people of Alaska,” he told reporters. “I believe if things are explained and in fact it can be shown and demonstrated that the current process we have for the PFD is not sustainable, show the data to the people of Alaska, make your case to the people of Alaska, explain it to the people of Alaska and then give the people of Alaska the final say as to whether they accept the rationale and changes should be made or not.”

In the committee

Members of the Permanent Fund Working Group during the group’s June 19, 2019 meeting. (Photo by Matt Buxton/TMS)

The Permanent Fund Working Group’s meeting was designed as a long-ranging look at the history of Alaska statehood, the formation of the Alaska Permanent Fund and the permanent fund dividend.

The meeting is still ongoing, but one of the takeaways from the morning discussion was interest in the history of eligibility requirements for receiving the dividend.

Senior Assistant Attorney General Cori Mills discussed the U.S. Supreme Court Case Zobel v. Williams that struck down the initial proposal to base the size of the dividend on how long people had lived in Alaska. Mills explained that the key takeaway is that the constitutionality of these requirements rests in the purpose of them.

She said in Zobel the intent was to offer unequal cash payments to Alaskan citizens, which violated the equal protection guarantees of the constitution.

But there’s more room, she said, when using a test to determine whether or not someone is a citizen.

Legislators asked if there had been residency requirements longer than one year that had been found constitutional. Mills didn’t have a definitive answer at the time.

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1 Comment on "Dunleavy says it’ll be on PFD working group to prove changes are needed"

  1. Caleb Stewart | June 21, 2019 at 10:07 am | Reply

    the governor wants changes if proposed to the pfd formula to go to a vote of the people. the governor gets to veto legislative appropriations. it takes 3/4 vote to overturn a governors appropriation veto. this governor feels that threshold is appropriate. so it should be on a public vote. if working group proposes significant change to pfd formula, a public vote should require a 3/4 threshold to overturn.

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