KENAI - Is it a stroke of legislative genius, a short-sighted plan or just a new verse of an old tune?
Alaska legislators praised and criticized Rep. Jim Whitaker's pre-filed bill that proposes using the income from the Alaska Permanent Fund earnings reserve. The legislation would add half the investment income collected this year from the fund's earnings reserve account to the dividend payout and the second half, reported to be approximately $200 million, would go into a capital projects fund.
Ryan Colgan, a staffer for Fairbanks Republican Whitaker, was careful to clarify that the bill focuses on "the earnings of the reserve account."
"That money would be split half toward capital projects and half toward a supplement to the dividend," Colgan said.
That supplement could increase the dividend dramatically.
Colgan said no specific capital projects were considered, "but rather the broad sense, growing and developing the infrastructure in the state of Alaska to facilitate economic growth."
Offering Alaskans an increased dividend and tapping into the earnings isn't a new idea.
Former Sen. Jerry Mackie, a Craig Republican, caused a stir last March by proposing to pay half the permanent fund's $27 billion in a one-time $25,000 dividend to each Alaskan and using the remaining funds to balance the state's budget.
"Legislators can't continue to just ignore fiscal realities that our state will be facing, and I firmly believe, although I won't be in the Legislature anymore, that new ideas and options should be brought forth and fully debated," Mackie said.
Rep. Bill Hudson, a Juneau Republican, said Whitaker's proposal would take care of two problems at once.
"We have excess earnings in the permanent fund. (Whitaker's) bill, on a one-time basis only, would take a portion of those excess earnings after inflation-proofing and put them into the permanent fund dividend at a greater amount than you're getting at the present time," Hudson said. "Instead of $2,000, the public may get up to $2,500, depending on how many apply for it and what the total pot of earnings is."
Hudson said he has worked closely with Whitaker over the last two years.
"We both believe that Alaska cannot sit on its hands just because we've had a windfall for the last year, " Hudson said. "It's our responsibility to put before the public the facts as we see them. That's what the legislative process is all about."
Rep. Carl Moses, an Unalaska Democrat, compared Whitaker's legislation to his own proposal. Moses' plan, also pre-filed, is to use the earnings to create a municipal dividend program, basing allocations to organized municipalities on population and specific funding formulas.
"I'd rather see it done on a per-capita basis and given back to local government so they can decide what capital projects they want to use it for," Moses said. "Or they could just put it in a savings account and maybe start a permanent fund on the local level."
Senate Majority Leader Loren Leman, an Anchorage Republican, predicted such proposals will undergo careful examination. But Leman said a one-year plan may not be the wisest course of action.
Sen. John Torgerson, a Kasilof Republican, also urged consideration of the big picture.
"Right now we're looking at a $514 million deficit," he said. "If we're deficit spending, it doesn't make a lot of sense to spend this money on other things. This is not the time to lose our cool."