In 2019, the legislature transferred $4 billion from the ERA (the fund that pays out PFD’s) to the corpus of the permanent fund, to pre-pay inflation proofing of the permanent fund for the next several years.
Even after reducing the amount available for PFD’s by $4 billion last year, ostensibly for future “inflation proofing”, the supplemental budget transfers an additional $4 billion from the PFD fund this year, to double pay the same “inflation proofing” for the next several years.
In truth, the transfer has nothing to do with inflation proofing, as the corpus was already inflation proofed by $4 billion dollars less than a year ago. The money is being moved out of the PFD fund so that it will no longer be available to pay current or past PFD’s.
Under current state law, $5.2 billion is owed to Alaskans for this year’s dividend, and the portions of previous dividends that the legislature has refused to transfer to the people. By voluntarily transferring $8 billion out of the PFD fund, and not appropriating money to pay this debt, the legislature is ensuring that this debt to the people can never be paid.
At the same time that this transfer is to take place, house legislators are also putting forward legislation to direct the majority of those funds to govt. They are planning to do so indirectly, by first moving funds to the corpus of the permanent fund, and then permanently changing the calculation of the PFD from a 50/50 split between dividends and state bureaucracy to an 80/20 split favoring government (Rep. Chuck Kopp’s bill) or even an 85/15 split favoring government (Rep. Adam Wool’s bill). Under Rep. Wool’s bill, instead of a $2,850 PFD this year, Alaskans would receive less than $900 for their 2020 PFD.
And so, at the very time Alaskans are most in need of a full PFD due to today’s failing economy, tonight’s supplemental takes away what little hope they have of receiving it.