FOR IMMEDIATE RELEASE
February 6, 2014
JUNEAU – Today, Representative Les Gara (D-Anchorage) presented a constitutional amendment to enshrine the Permanent Fund Dividend program in the Alaska Constitution to the House State Affairs Committee.
“With a rollback of oil revenue, there is a great fear that some politicians will seek to cut the dividend,” said Gara, the prime sponsor of the proposed amendment. “Instead, we should protect the dividend and seek a fair share of our oil.”
The proposed constitutional amendment (HJR17) would place the current statutory dividend program into the state constitution. Currently, there is no language in the constitution to establish or calculate a dividend. The constitution also contains no language to protect funds from the Permanent Fund eligible for dividend distribution from being spent by the legislature for other purposes.
“With billion dollar deficits now and into the future, now is the time to send a clear message that using the dividend to fill those gaps is off the table,” said House Democratic Leader Chris Tuck (D-Anchorage), a co-sponsor of the resolution. “The first thing we should do is get a fair return for our resources and get more of them to market.”
According to a University of Alaska Anchorage Institute of Social and Economic Research 2010 report, “most of the cash from dividends will ultimately find its way into the Alaska economy to increase employment, population, and income. A rough estimate of the total (direct and indirect) macroeconomic effects of this increase in purchasing power is 10 thousand additional jobs, 15 to 20 thousand additional residents (drawn to the state because of the jobs), and $1.5 billion in additional personal income.”
In 2002, former Governor Jay Hammond proposed a ballot proposition to require a vote of the people to change the dividend program or to spend the Permanent Fund earnings. Lieutenant Governor Loren Leman rejected the petition, and, later is his term, then Governor Frank Murkowski proposed using Permanent Fund earnings to help fill the state budget deficit. At the same time, the Legislature entertained a number of changes to Permanent Fund management and the dividend distribution formula. In light of these attempts to spend Permanent Fund earnings, Democratic legislators proposed enshrining the dividend program in the constitution.
“Oil revenues are declining and we’re dipping into our savings accounts. When that money’s gone, the Permanent Fund is the next likely target, so we should act now to protect it,” said Representative David Guttenberg (D-Interior/Wade Hampton), a co-sponsor of the resolution. “Alaska’s families depend on annual dividends; we owe it to them to maintain a healthy Permanent Fund long into the future.”
Representative Geran Tarr, Representative Andy Josephson, Representative Harriet Drummond, Representative Jonathan Kreiss-Tomkins, and Representative Scott Kawasaki are all co-sponsors of HJR17.
The House State Affairs Committee heard the proposed amendment briefly. The committee chairman said the committee would bring the bill back before the committee at a later date.