With just a few weeks left in the legislative session, House and Senate budget writers appear to agree that $2,600 is a good number to put into the hands of Alaskans this fall. But how they get there is different.
The House-passed version of the state budget appropriates enough money to send every eligible Alaskan about $2,600 — half would be the annual Permanent Fund dividend, and half would be called “energy relief” to help people pay the higher prices for gasoline, diesel and heating fuel. Those same high prices have generated a lot of money for the state treasury from oil production tax and royalty checks, and House members figured it made sense to share.
The Senate Finance Committee also is looking at $2,600 checks this fall, but with a different calculation.
The committee’s latest version of the budget, as of Monday, did not include funding for an energy relief check. Instead, the committee has sent a separate bill to the full Senate for consideration that would pay out a $2,600 dividend.
The Senate committee approach is to pay the $2,600 out of the annual withdrawal of Permanent Fund earnings. This is the fifth year the Legislature will withdraw a fixed amount from the fund to help pay for public services and dividends. The committee plan is to split that withdrawal 50% for dividends and 50% for public services, but only for this year. Starting next year, the PFD would drop back to maybe $1,400. Same as the House plan that would drop the energy relief check after one year.
Not only do the Senate and House plans arrive at the same one-time $2,600 payout, but they essentially use the same money.
Permanent Fund earnings, oil taxes and royalties are all general fund dollars that flow into the state treasury for the Legislature to spend. The state has one pot of money for school funding, road maintenance, the university system, troopers — and PFDs. It really doesn’t matter if the House says half of the $2,600 is from Permanent Fund earnings and half is from oil revenues, versus the Senate committee plan which takes all of the $2,600 from Permanent Fund earnings. It is the same checking account.
What matters is that they agree it’s one time. House and Senate leaders generally acknowledge that the state cannot afford a $2,600 PFD every year. This year’s $100 oil prices will not last forever, and legislative leaders worry that the public might get unrealistically hooked on a large PFD only to see it shrink, which would not make voters happy.
The House wants Alaskans to know that half of the check this year is temporary oil money.
The Senate committee bill says next year’s dividend would drop to a 25% share of fund earnings until the Legislature raises more revenue to balance the budget, meaning taxes, to afford a 50% dividend.
While agreeing on a larger check this fall by whatever name, the leadership in both chambers wants the public to understand it’s not affordable longer term without new revenues to pay the bills. That’s a message all Alaskans need to understand.
—Wrangell Sentinel
Reader Comments(0)