02/06/2014 08:00 AM House STATE AFFAIRS

         HJR 17-CONST AM: GUARANTEE PERM FUND DIVIDEND                                                                      
                                                                                                                                
9:53:55 AM                                                                                                                    
                                                                                                                                
CHAIR LYNN announced  that the final order of  business was HOUSE                                                               
JOINT   RESOLUTION   NO.   17,  Proposing   amendments   to   the                                                               
Constitution  of  the State  of  Alaska  relating to  the  Alaska                                                               
permanent  fund,  establishing   the  earnings  reserve  account,                                                               
relating  to  the  permanent fund  dividend,  and  requiring  the                                                               
permanent  fund dividend  be at  least equal  to the  amount that                                                               
would be calculated under current law.                                                                                          
                                                                                                                                
9:53:58 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LES  GARA, Alaska  State Legislature,  as sponsor,                                                               
introduced HJR  17.  He  said the proposed joint  resolution asks                                                               
for the  current dividend formula  to be put in  the Constitution                                                               
of the  State of Alaska.   He mentioned that he  and Rick Halford                                                               
were friends with the late Governor  Jay, who would say, "You get                                                               
a  fair share  for your  oil first,  and you  touch the  dividend                                                               
last."  He said the  Alaska permanent fund dividend (PFD) creates                                                               
roughly  10,000 jobs  in Alaska  and  "levels out  the highs  and                                                               
lows."  He  explained that Alaska has had  the least differential                                                               
growth between rich and poor than  any other state in the country                                                               
because of the  PFD.  He opined that cutting  the dividend is the                                                               
most regressive action  that can be taken, because  cutting it by                                                               
$500,  while not  significantly  impacting someone  who makes  $1                                                               
million, would  impact someone  who makes $12  an hour;  it would                                                               
affect the working class.                                                                                                       
                                                                                                                                
9:55:19 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARA cited an article  from The Juneau Empire that                                                             
quotes  Governor  Hammond as  having  said  his dividend  program                                                               
would allow Alaskans  to share in their  resource wealth, confine                                                               
the benefits to  Alaskans only, have an equitable  impact on both                                                               
rich  and  poor,  and  maximize the  favorable  impact  upon  the                                                               
state's economy by keeping a far  larger portion of money to fund                                                               
the programs here in Alaska.   Representative Gara said as fiscal                                                               
pressures mount in Alaska, there are  some who will look first to                                                               
the  PFD.   He  stated  he  would  like  to protect  the  current                                                               
dividend formula  in the constitution  so that the  dividend does                                                               
not get decreased as people begin fighting over deficits.                                                                       
                                                                                                                                
REPRESENTATIVE GARA said the Department  of Revenue has predicted                                                               
that  even under  "this new  oil bill,"  Alaska will  be down  to                                                               
approximately 370,000 barrels  of oil a year in  ten years' time.                                                               
He said  that is "about  the same as  they had predicted  under a                                                               
former oil law."  He said the  state is probably going to be down                                                               
in  revenue  by  about  $12  billion over  the  next  ten  years,                                                               
depending upon oil  prices.  He reiterated that he  does not want                                                               
the people's dividend  to be harmed.  He expressed  his hope that                                                               
SB 21  would be reversed,  but said  regardless of how  the state                                                               
proceeds, the  dividend has been  a way to stabilize  the economy                                                               
in Alaska  and to  ensure those  in rural  Alaska have  money for                                                               
essentials, such  as fuel.  He  said the dividend money  spent by                                                               
rural and urban  Alaskans goes right back in to  the economy.  He                                                               
relayed there is a study by  the Institute of Social and Economic                                                               
Research (ISER)  in the  committee packet,  which shows  what the                                                               
PFD  does to  stabilize  the  economy and  prevent  the wide  gap                                                               
between rich and poor.                                                                                                          
                                                                                                                                
9:58:17 AM                                                                                                                    
                                                                                                                                
RICK HALFORD thanked  the committee for hearing HJR  17, which he                                                               
opined is an important issue.  He continued as follows:                                                                         
                                                                                                                                
     It is  sad that  the constituency for  equality doesn't                                                                    
     have  enough  insiders  in  that  it's  not  regressive                                                                    
     enough for  some or progressive enough  for others, but                                                                    
     the fact is that the  permanent fund dividend is a part                                                                    
     of the  economic base of the  State of Alaska.   And if                                                                    
     you did need $100 million,  who would want to take half                                                                    
     of that  from the poor, retired,  and underemployed and                                                                    
     100 percent  of it from Alaska  residents, nothing from                                                                    
     nonresidents?   It's the worst  place to go  for money,                                                                    
     even in a time of shortage.                                                                                                
                                                                                                                                
[HJR 17 was held over.]