What harm to Alaska by paying a $3000 PFD? Business community survey says, “a lot”.

Special committee appointed to finalize budget, PFD payout
Steve Quinn, KTVA, May 6, 2019

Negotiations over Alaska’s operating budget now rest in the hands of six lawmakers, three each from the state House and Senate. House Finance Committee co-chairs Reps. Neal Foster, D-Nome, and Tammie Wilson, R-North Pole, and committee member Rep. Cathy Tilton, R-Wasilla, represent the House. Senate Finance co-chairs Sens. Bert Stedman, R-Sitka and Natasha von Imhof, R-Anchorage, plus committee member Sen. Donny Olson, D-Bethel, represent the Senate. The committee will hold its first meeting on Tuesday afternoon, but it’s listed as just an organizational hearing. The most significant difference between the two chambers’ budget proposals lies with the Permanent Fund dividend. The House did not include a dividend in its budget, saying it would wait for further discussions with the Senate. The Senate proposed a $3,000 dividend, but it would take another $1.2 billion from either a savings account or the fund’s earnings reserve, which has close to $18 billion.

Our Take: Here we are in the final hours of a heated budget discussion – 6 legislators will be making critical decisions this week. According to recent polling of Alaska Support Industry Alliance members, we believe that a vast majority of business owners in Alaska would prefer a reduced PFD in the ballpark of $1,200-$1,600 coupled with spending cuts in the $300 million range and a spending cap that works.  The polling also indicates thousands of Alaskans are okay with a reduced PFD if it means avoiding drastic cuts to state services all in one year. A clear message from the poll? Instability in the business community, created by passing a budget that drastically reduces state services, pays a $3000 dividend and leaves a $1.2 billion hole to fill, could do great harm to Alaska’s economy.