A bill to redirect millions in oil revenues from the permanent fund to state spending passed the House on Tuesday.
The measure rolls back a decision made two decades ago by the Legislature to put more oil revenues into the principal of the permanent fund.
It would generate millions for the state's general fund budget and have minimal impact on dividend checks, said its sponsor, Rep. Norman Rokeberg, an Anchorage Republican.
Dividend checks would be reduced by about $1 in 2005 and drop by $20 in 2012 under the measure, the state Department of Revenue estimated. Each year, it would put $40 million to $55 million into the state general fund that otherwise would go to the principal of the permanent fund.
The measure Rokeberg wants to repeal was approved in 1980. The state was awash in oil money, Rokeberg said, so the Legislature decided to boost the share of royalty revenues from new fields that went into the permanent fund.
Half of the royalties from new fields tapped after that date, instead of the constitutionally mandated 25 percent, went into the permanent fund
Now the state faces a chronic budget shortfall and new revenues are needed to balance state spending, Rokeberg said. "This bill is not a raid on the permanent fund. This bill is a positive step in helping right the financial situation in the state."
Critics argue the bill is a raid on the permanent fund. They say its effect on dividends is being played down.
"This is a reduction of the dividend without a vote of the people," said Rep. Eric Croft, an Anchorage Democrat. "The defense that it's a small reduction misses the point."
Effects on dividends will be more dramatic as the state's oil production increases, opponents say, since fewer oil dollars will go into the principal of the permanent fund.
Voters rejected a ballot measure in 1999 asking whether to spend permanent fund money on state government, Croft argued.
He offered an amendment to put an advisory referendum before voters in 2004, but the idea was defeated 24-12.
Rokeberg has offered the bill in past sessions but it has always foundered in the Senate. Senate President Gene Therriault, R-North Pole, supports the measure. He said it had a better chance of receiving a hearing in the Senate this year given the state's fiscal situation.
Even if the Senate approves the measure, Croft said, it could run into a problem. Gov. Frank Murkowski could not sign it without breaking a campaign promise to put any change to the permanent fund to a statewide vote, the Democratic representative said.
During the camping, Murkowski pledged not to support any change to the permanent fund or the dividend program without a vote of the people.
But a spokesman for the governor said this measure would not necessarily require such a vote.
"You are dealing with money going into the permanent fund, not money going out of it," said spokesman John Manly.
© 2018. All Rights Reserved. | Contact Us