Gov. Mike Dunleavy proposed on Wednesday, May 12, constitutional amendments which would incorporate the Permanent Fund into the state constitution, along with the state’s power cost equalization endowment.
Dunleavy said this would protect the state’s power cost equalization endowment and strengthen the Permanent Fund. If approved by legislators, the amendments would appear on the November 2022 general election ballot.
The governor said these constitutional amendments would create a healthier economic future for the state “by removing the politicized uncertainty they face year after year.”
“I’m excited to work with the governor and my colleagues, majority and minority, on a solution to resolve the divide over the Permanent Fund and the dividend program,” said Speaker of the House Louise Stutes, R-Kodiak. “The governor clearly recognizes that cuts will not solve our budget deficit, and that services like the Alaska Marine Highway System and K-12 education are essential to Alaskan communities.
“Let me be clear, this proposal is a starting point, not a final product. However, I’m encouraged by the broad support to address an issue that has politicized a false choice between essential services and the size of the dividend.”
With the Legislature still struggling in a limited time slot to approve the state budget, which has passed the House and is now before the Senate, it is uncertain whether the proposed constitutional amendments will get the votes needed to go to the future general election ballot.
The governor introduced his Senate Joint Resolution 6, which would move $800-$900 million in Power Cost Equalization funds in with PFD monies, during a virtual media teleconference from Juneau. “We are positive the passage of SJR 6 will resolve the long-standing dispute over the permanent fund and the PFD, and further protect the power cost equalization endowment within the Permanent fund itself,” he said.
The governor’s office said that after years of spending down savings, state government is approaching a situation in which the Permanent Fund Earnings Reserve is exposed to spending by a simple majority vote of legislators. His proposal would establish protections to prevent ad hoc spending from the Permanent Fund and allow for continued growth, he said.
Dunleavy said his proposed action would create a fair and sustainable 50-50 split of Permanent Fund earnings between PFDs and core state services and shield the $1 billion power cost equalization endowment from politicians by depositing it in the fund’s corpus. It would also protect future state budgets from significant deficits by transferring $3 billion from the Permanent Fund Earning Reserve account to the Constitutional Budget Reserve, he said.
Asked what steps the state has taken meanwhile on Dunleavy’s much-publicized plan to expand the state economy, the governor noted the state’s multi-million-dollar investment in new cold
storage facilities for Anchorage International Airport, one of the world’s busiest cargo airports.
Dunleavy also credited the Trump administration with plans to open up the Arctic National Wildlife Refuge and Tongass National Forest for resource development, which he said were now on hold because of decisions made by the new Biden administration.