FOR IMMEDIATE RELEASE
August 11, 2016
Senator Wielechowski: Permanent Fund Corporation Must Follow Law and Transfer Funds Sufficient for Full Payment of Permanent Fund Dividends
ANCHORAGE – Yesterday, Senator Bill Wielechowski (D-Anchorage) sent a letter to Angela Rodell, Chief Executive Officer of the Permanent Fund Corporation, requesting the Permanent Fund Corporation follow Alaska law and transfer from the Earnings Reserve Account to the Dividend Fund the statutorily required amount necessary to pay every Alaskan a full Permanent Fund Dividend.
The Alaska Constitution, at Article IX, Section 15 states that income generated from the Permanent Fund “shall be deposited in the general fund unless otherwise provided by law.” In the early 1980s, after a lengthy debate, the Alaska Legislature followed this Constitutional prerogative and “provided by law” the payment of PFD checks to eligible Alaskans. The Legislature enacted AS 37.13.140, which creates a formula for determining the income available within the Earnings Reserve Account for distribution to Alaskans via the PFD. AS 37.13.145(b) then requires, “the corporationshall transfer from the earnings reserve account to the dividend fund…” (underline added) funds sufficient to pay Alaskans their PFDs.
An early Attorney General opinion found that this transfer of funds was automatic, and required no legislative appropriation. Although a subsequent Attorney General opinion came to a contrary opinion, the Alaska Supreme Court did an analysis in 1994 and stated, “A percentage of the money in the reserve account is automatically transferred to the dividend fund at the end of each fiscal year. AS 37.13.145(b).” Hickel v. Cowper, 874 P.2d 922 (Alaska 1994) (Underline added).
In June, Governor Bill Walker vetoed several programs and projects in an attempt to reduce the state’s fiscal deficit. This package of vetoes included slashing $695.6 million from the allocation to Alaskans’ Permanent Fund Dividends, reducing the PFD by more than half – from the anticipated full amount of roughly $2,100, to $1,000 per Alaskan. The Permanent Fund Corporation has indicated it intends to comply with the Governor’s request to withhold transfer of those funds instead of making the normal, automatic and routine transfer from the Earnings Reserve Account to the Dividend Fund.
In his letter, Sen. Wielechowski noted the Alaska Statutes, Alaska Constitution and Alaska Supreme Court are definitive, the transfer of funds for payment of the PFD is to be done “automatically”, and is not subject to veto.
“There doesn’t seem to be any gray area here,” said Sen. Wielechowski. “The wording is crystal clear from a legal perspective that the transfer of money ‘shall’ happen. ‘Shall’ is not up for debate, or subject to any Governor’s veto. This is the law that was established pursuant to the Alaska Constitution, and the Permanent Fund Corporation cannot simply ignore the law, especially when the Supreme Court has analyzed this law and stated this transfer is automatic. I urge the Permanent Fund Corporation to follow the law and make this full transfer.”
For more information, contact Alaska Senate Democrats Press Secretary, Jeanne Devon, at (907) 269-0173.