Alaska Senate leaders introduced a bill Monday to change the Permanent Fund dividend formula to stabilize future payments. The proposal would allocate 75% of the annual fund transfer to state services, leaving 25% for dividends.
Senator Lyman Hoffman and six finance committee members sponsored Senate Bill 109, emphasizing the need for a consistent dividend structure. They believe this formula would prevent future disputes over dividend amounts and ensure reliable funding for state services.
Hoffman explained that this proposal deserves a serious discussion because Alaskans need predictability in funding essential services and dividends. He acknowledged that senate leadership had not consulted all majority members but stressed unanimously within the committee.
Under the new plan, Alaskans would receive an estimated $1,420 this year, though future amounts depend on fund performance and budget needs. The current formula, last followed in 2015, has led to annual legislative battles over dividend amounts.
Despite past support for the 72-75 split, the legislature has never enacted it. Instead, lawmakers have set the dividend manually each year, leading to uncertainty. The proposed formula faces resistance as funding gaps complicate state budget planning.
If lawmakers approve an increased K-12 education budget, they may struggle to afford both priorities. Fiscal analysts estimate a $500 million deficit next year if the state 72-75 split while increasing school funding.
Some House members have suggested reducing the Permanent Fund dividend formula to $1,000 to balance the budget. Others argue that closing tax loopholes, such as eliminating a per-barrel oil tax credit, could generate enough revenue to support both parties.
Senator Jesse Kiehl warned that failing to act could lead to further dividend cuts. He stated that they need a substantial plan, or there might be a risk of eliminating the dividend. The legislature will continue debating the proposal while considering corporate tax changes and oil revenue adjustments. If approved, Senate Bill 109 could create a long-term framework for balancing state spending and divided payments.
This news article was originally published by Alaska Beacon.
