Legislature(2021 - 2022)GRUENBERG 120
05/24/2021 01:00 PM House JUDICIARY
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| Audio | Topic |
|---|---|
| Start | |
| HJR7 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HJR 7 | TELECONFERENCED | |
| + | TELECONFERENCED |
HJR 7-CONST. AM: PERM FUND & PFDS
[Contains discussion of SJR 6.]
1:02:09 PM
CHAIR CLAMAN announced that the only order of business would be
HOUSE JOINT RESOLUTION NO. 7, Proposing amendments to the
Constitution of the State of Alaska relating to the Alaska
permanent fund, appropriations from the permanent fund, and the
permanent fund dividend. [Before the committee was CSHJR
7(STA).]
1:03:37 PM
LUCINDA MAHONEY, Commissioner, Department of Revenue, , on
behalf of the House Rules Standing Committee, sponsor by request
of the governor, introduced CSHJR 7(STA) via a PowerPoint
presentation, titled "HJR 7 Permanent Fund Constitutional
Amendment: First Step to a Comprehensive Fiscal Plan for Alaska"
[hardcopy included in the committee packet]. She noted that
some slides would refer also to SJR 6, a companion joint
resolution in the Senate. She named the goals of [CSHJR
7(STA)], as listed on slide 2, which read as follows [original
punctuation provided]:
1. Protect the Permanent Fund and Permanent Fund
Dividend (PFD)
2. Determine Consistent PFD for Alaskans
3. Establish Strong Reserves
4. Achieve a Sustainable Balanced Budget
COMMISSIONER MAHONEY discussed the next steps to be taken, as
shown on slide 3, which read as follows [original punctuation
provided]:
Step One - First Special Session
? Permanent Fund Structural Fix Permanent Fund & ERA
? Establish Strong Reserves w/Bridge Appropriation
? Consensus on Deficit Size Required
Spending/Revenue Targets
Step Two - Second Special Session
? Revenue/Reduction Initiatives to Achieve Balanced
Budget
COMMISSIONER MAHONEY said in addition to structurally fixing the
permanent fund, the goal of the first special session would be
to collapse the earnings reserve account (ERA) into the
permanent fund. She added that the bridge appropriation would
be $3 billion, noting that further explanation would be
forthcoming. She said these two special sessions are viewed "as
working together to establish a structured and disciplined
fiscal plan."
1:07:38 PM
MIKE BARNHILL, Deputy Commissioner, Department of Revenue,
reviewed slides 4 and 5, titled "Permanent Fund Endowment
Structure," which read as follows [original punctuation
provided]:
[slide 4]
? It's time for a true Permanent Fund endowment.
? Endowment approach is an internationally accepted
best practice.
? Limits annual government draw to fixed Percent of
Market Value (POMV).
? Stabilizes revenues with a smoothed five-year
average.
[slide 5]
? POMV set at 5% of the lagging 5-Yr average market
value
? Current statutory POMV is also 5%
? Limits spending while allowing the fund to grow to
keep up with inflation
? Spend only the real return over time.
? Example:
? Average Return since Inception: 7%
? Inflation: 2%
? Real return: 5%
? Limiting spending to 5% inflation-proofs the
Permanent Fund
MR. BARNHILL related that most institutional funds are
structured as an endowment, which is a one-account structure
from which a fixed percentage is taken annually. He noted that
the fixed percentage is designed to automatically inflation
proof the endowment. He expounded that under the permanent
fund's current structure, inflation proofing the principal
requires making an appropriation back to the principal account,
whereas an endowment would leave money in so that the fund
automatically inflation proofs over time. Regarding slide 5, he
added that the benefit of a lagged percentage is the certainty
that the formula will produce at the start of the budget cycle.
1:13:13 PM
MR. BARNHILL discussed the mechanics of CSHJR 7(STA), shown on
slide 6, which read as follows [original punctuation provided]:
? Permanent Fund transitions into one,
constitutionally protected account (FY24)
? Percent of Market Value (POMV) distribution method
put into the constitution
? Permanent Fund Dividend (PFD) established in the
constitution
? POMV set at 5%
Governor is proposing an equitable 50/50
distribution
? 50% Dividends
? 50% Government Services
? Any change to PFD must be approved by a vote of the
people
MR. BARNHILL explained that under CSHJR 7(STA), the permanent
fund would transition from a two-account structure - the
principal and ERA - to one endowment account structure.
Additionally, this proposal would establish into statute the
percentage of allocation between the dividend [50 percent] and
government expenses [50 percent]. He noted that under CSSJR
6(JUD), the 50/50 allocation is constitutionalized, which is one
of the differing factors from CSHJR 7(STA).
MR. BARNHILL directed attention slide 7, "Permanent Fund
Dividend: Consistency," which read as follows [original
punctuation provided]:
Current Challenge:
? Public Mistrust: Too much Government spending
? Political Impasse: Results in a PFD Based on
Politics Not Laws
Solution:
? Restore Public Trust: Consistent PFDs and Spending
Limits
? Establish a Fair Resolution: 50/50 Split
Constitutionalize PFD
MR. BARNHILL explained that the graph on slide 7 provides an
historic view of dividend payments from 1982 to 2016, which were
calculated and paid per the statutory formula. From 2016-2021,
the graph shows the statutory dividend [green line] versus the
amount that was actually paid [orange line]. The dotted gray
line indicates what would have been paid under a 50/50
allocation. He related that the statutory formula is 50 percent
of a five-year average of statutory net income, whereas the
governor is proposing 50 percent of a five-year average of 5
percent of market value (POMV). He opined that the proposal
offers rule-based consistency and would solve issues related to
public mistrust and legislative impasse.
1:17:42 PM
MR. BARNHILL continued on the topic of consistency by reviewing
slide 8, which read as follows [original punctuation provided]:
Alaskans deserve certainty concerning annual PFD
payment.
? State needs PFD consistency to attain budget
stability and sustainability.
? Absent certainty, determining future achievable
revenues/reductions is difficult and may result in
over/under collecting/taxing.
? 50% POMV dividend is an equitable distribution of
Alaska's wealth between its citizens and government.
? Resolving the PFD allows a discussion of required
revenues/reductions to close the remaining budget gap
(August Special Session)
Redirects the legislative conversation to growing
Alaska vs. debating PFD.
1:20:16 PM
COMMISSIONER MAHONEY discussed 50/50 and bridge funding, as
shown on slide 9, which read as follows [original punctuation
provided]:
? One-time use of our strong financial asset the
Permanent Fund - positions Alaska for long term fiscal
sustainability
? With $3.0 billion in bridge funding from the ERA, a
forecasted FY25 fiscal gap of ~$300M can be managed
with a combination of revenue measures and spending
reductions
? Other endowments are considering one-time increases
in draws to capitalize on exceptional market
performance
? Harvard's $42 Bill endowment increased from 5% to
7.5% on one-time basis
? https://www.thecrimson.com/article/2021/5/3/draw-
further-endowment-fy22/
? https://www.nytimes.com/2020/06/02/arts/endowments-
coronavirus.html
? This plan avoids the need for a new broad-based tax.
? Constitutionalizing a 5% POMV prevents overdraws in
the future
COMMISSIONER MAHONEY explained that the governor's proposal
would establish the aforementioned 50/50 proposal, as well as a
one-time draw from the [ERA] of $3 billion to enable the
transition to a sustainable budget. She noted that under
current projections, the $3 billion draw, which is referred to
as "bridge funding," and would provide sustainability until
2024/2025 without additional revenues or reductions. At that
time, she said, $300 million in additional revenues or
reductions would prevent the necessity of a broad-based tax.
COMMISSIONER MAHONEY detailed a comprehensive fiscal plan from
2021 through 2030 on slide 10, which read as follows [original
punctuation provided]:
$3.0 billion in bridge funding provides time to
establish achievable revenues/reductions.
? Beginning in FY24, $150 million to $300 million in
revenues/reductions balances the budget and begins to
grow reserves.
1:25:53 PM
MS. MAHONEY wrapped up the presentation with a summary, outlined
on slide 11, which read as follows [original punctuation
provided]:
? Protects Alaska's primary source of state general
fund revenue
? Preserves long-term value of the fund by limiting
annual draw
? Reestablishes the critical link between the people
and their government by providing every Alaskan a
share of the state's natural resource wealth
? Ensures that Alaskans have a voice in future
decisions regarding the permanent fund
1:27:41 PM
REPRESENTATIVE EASTMAN shared his understanding that the
legislature may take action, which would then trigger a vote by
the people. He asked Mr. Barnhill how this process is going to
work.
1:28:44 PM
MR. BARNHILL responded that the language detailing the mechanics
of the vote is on page 2, Section 2, Subsection (d), lines 9-19,
of HJR 7, and explained that it provides that any change to the
percentage allocation to the PFD approved by the legislature
would then be scheduled to be taken up by the voters at the next
statewide election held more than 120 days after enactment of
the law.
REPRESENTATIVE EASTMAN shared his understand that if the
legislature approves this change in year one for that year's
dividend, then the people wouldn't have the opportunity to vote
that year, but would have to wait to vote the following year,
and the law would not go into effect until the year after that.
He asked Mr. Barnhill if this is not the legislature deciding
what the dividend will be and the people not getting an
opportunity to vote on it for two years.
MR. BARNHILL responded that the percentage change would not take
effect until it is approved by the people. He explained that in
the scenario that Representative Eastman outlined, if there is a
two-year delay, then the change to the dividend would not take
effect until the people have approved it. Once the people
approve it, the change would not take effect until 90 days after
the certification of the election returns.
REPRESENTATIVE EASTMAN asked Mr. Barnhill, if the legislature
chooses to do something other than the current formula that is
being enshrined, what the consequences would be if the
legislature doesn't adhere to the current and not approved
formula.
MR. BARNHILL responded that this measure requires that the
percentage of the PFD be in statute. This is different from
what has been done in the state for the last few years, he said,
and although the law has been followed, it has not been put into
statute. He explained that under this paradigm, the percentage
is set by statute and the contemplation at play is that it moves
automatically per that statute.
1:31:55 PM
REPRESENTATIVE KURKA shared his understanding that there is a
potential three-year delay from when the legislature would
choose to change the PFD formula to when it would take effect.
He asked Mr. Barnhill what would stop the state from "continuing
doing what we are doing now and ignoring the law."
MR. BARNHILL responded that that's how it would work under CSHJR
7(STA). Under the companion measure in the Senate, CSSJR
6(JUD), the governor is proposing a fix to that allocation in
the constitution via a 50/50 split. He said that there is not a
role for the legislature to change that by statute and there is
not a role for the people to vote on anything. He said that,
essentially, it "cuts to the chase" and would follow a 50/50
split until the people amend the constitution again.
REPRESENTATIVE KURKA stated that he is confused because it seems
to him that there are two different proposals from the governor
[HJR 7 and SJR 6] that do different things.
MR. BARNHILL responded that he understands the confusion, but
that it is a product of Alaska's bicameral legislature and that
these two measures may "catch up to each other" at some point.
1:34:38 PM
REPRESENTATIVE SNYDER directed attention to slide 10,
"Comprehensive Fiscal Plan: Details," and asked for more
information regarding the assumptions that went into creating
the table included on the slide. She asked specifically about
growth of the fund and about anything else that resulted in the
numbers seen in the table.
1:35:13 PM
COMMISSIONER MAHONEY responded that in regard to the
unrestricted general fund (UGF) revenues seen in the first line
of the table, the spring forecast was utilized and the only
number that was adjusted was the POMV, which was adjusted
assuming a 6.25 percent annual return to the permanent fund.
She explained that that increase alone in the POMV due to the
significantly higher starting part for the fund is what drives
the revenues up significantly. In regard to the general fund
appropriation budget, she explained that these are the 10-year
numbers that are published by OMB. The year 2022 was adjusted
to reflect supplementals, she said.
REPRESENTATIVE SNYDER recalled the example that Commissioner
Mahoney provided earlier in her presentation of a Harvard study
where researchers conducted a one-time draw from 5 percent to
around 7.5 percent, which she said is what she understands to be
a justification for the bridge draw. She asked for
clarification on whether the way the resolution as written would
disallow anything like this to occur in the future.
MR. BARNHILL responded that that is correct, it would be capped
at 5 percent until the constitution is changed.
1:37:17 PM
REPRESENTATIVE DRUMMOND directed attention to slide 3, "Next
Steps," and asked Mr. Barnhill what is preventing the state from
collapsing the ERA into the permanent fund now, as opposed to
what the [resolution] proposes.
MR. BARNHILL responded that the current language in the
constitution was promulgated in 1976 and uses the terms,
"principal and income," which he said is a standard way of
setting up a trust account that goes back hundreds of years. He
explained that this is where the state's two account structures
come from. He shared that there have been discussions about
enacting this through statute, but that the difficulty involved
with that method would be in determining the boundaries of
legislative appropriation. He explained that it is the view of
the Department of Law (DOL) that if the state is going to do an
endowment, then it needs to be done through the constitution to
ensure that the PFD is protected "forever" and that there are no
questions on where the boundaries are regarding legislative
appropriation.
REPRESENTATIVE DRUMMOND asked whether there would be some
revenue lost in the proposed bridge appropriation in moving $3
billion out of the PFD and into the reserve accounts.
1:39:01 PM
COMMISSIONER MAHONEY responded that there would be a short-term
revenue loss as a result of moving the bridge money into the
constitutional budget reserve (CBR). She explained that the
plan would be to manage the transfers in a manner that would
allow the funds to stay in the permanent fund for as long as
possible, and the funds would be transferred only as needed so
that the maximum returns on investment could be generated.
1:39:31 PM
CHAIR CLAMAN shared his understanding that the $3 billion bridge
withdraw would be an overdraw under the current law. He asked
what the justification is for "breaking the law in order to make
the law."
COMMISSIONER MAHONEY responded that the proposal to transfer the
$3 billion is to recognize that in order to position the state
in a way that is fiscally sustainable, there needs to be an
unusual action taken in terms of an overdraw. She explained
that it would be a one-time occurrence and would be sustainable
into the future.
CHAIR CLAMAN shared his understanding that Commissioner Mahoney
can justify breaking the law because the theory is that it would
make it possible to not have to break the law in the future.
1:40:45 PM
MR. BARNHILL replied that there has been a lot of discussion
over the years regarding which laws are constitutionally
enforceable and which ones are not.
CHAIR CLAMAN interjected that this is a law specifies "5
percent," and this proposal would break the law. He asked what
the policy reason is to break the law.
MR. BARNHILL responded, "Given the funding deficits, to comply
with all of the statutes that are on the books." He said that
the state is in a difficult situation because there is a PFD
statute that says, "pay this amount," but the state doesn't have
enough money to pay a statutory dividend.
CHAIR CLAMAN, regarding the dividend amount, said the court is
very clear that "we don't have to."
MR. BARNHILL responded that he thinks that the court would also
say that because the legislature's power of appropriation is
plenary, it is constitutional. He said that it is the same
policy issue with respect to Senate Bill 26 [signed into law on
6/27/18, during the Thirtieth Alaska State Legislature] as it is
to AS 43.23.
CHAIR CLAMAN, with reference to the aforementioned Harvard
study, asked how much of Harvard's total annual spending is
being paid by the endowment. He shared that Alaska's current
endowment to support state government is 70 percent.
MR. BARNHILL replied that he does not know, but he can get that
information to the committee. He commented that there are
hundreds of university endowments; some account for a small
percentage of the budget, while some account for a large
percentage of the budget.
1:42:26 PM
COMMISSIONER MAHONEY shared that she was advised that it was 70
percent but could provide that specific data to the committee.
She noted that she was surprised by that number.
CHAIR CLAMAN, with regard to Representative Drummond's earlier
question about how the CBR, the earnings reserve, and the
permanent fund corpus are invested, asked if those three aren't
invested differently due to issues of liquidity. He asked
Commissioner Mahoney if she could detail those differences.
COMMISSIONER MAHONEY responded that the earnings reserve and the
corpus are invested the same but are simply accounted for
differently. She explained that the two accounts have the same
asset allocation, which is a high-risk allocation. She
explained that the CBR is a working capital fund and is
currently invested in cash equivalents, which is significantly
lower. She said that this is why these draws would be managed
based on need.
1:43:54 PM
CHAIR CLAMAN opened public testimony on CSHJR 7(STA).
1:44:53 PM
YOLANDA CLARY testified in support of Governor Dunleavy's
proposal to protect the PFD. She explained that she wants to
protect the PFD, wants it preserved and reestablished, and she
wants a voice for the people who are not a part of the
legislature. She proposed that [the legislature] follows the
Governor's formula and proposals to protect the PFD.
1:46:01 PM
DAVID HURN expressed that he is sick of the legislature robbing
[Alaska residents] of what is rightfully [theirs]. Mr. Hurn
stated that he wants the legislature to follow the original
formula set up behind the dividend and its distribution. He
expressed that he felt the legislature was not representing the
will of the people, and reiterated that he felt it was thievery
not to distribute the full statutory PFD.
1:47:37 PM
MIKE COONS spoke in support of SJR 6 over HJR 7. He accused the
legislature of being more concerned with government growth than
with the health of the economy. He argued that Alaskans getting
a full PFD would circulate more money in the economy than
[government contracts to] special interest groups. He stated
that he does not support the percent of market value (POMV) cap,
and that he believes it is being abused. Mr. Coons argued that
past legislatures stayed within the budget, but recently the
legislature has spent down the CBR and now is going to spend
down the ERA. He proposed a 4 percent POMV cap with a 50/50
split instead of a 5 percent POMV cap.
1:49:46 PM
DANA YORK compared the governor's proposal to "the bridge to
nowhere," explaining that it doesn't make any sense. She opined
that the legislature is robbing the people. She expressed that
she wants the legislature to use the original formula for the
PFD, and she agreed with the previous testifier, Mr. Coons. Ms.
York explained that she voted for the governor because he was
going to pay out full PFDs, but this hasn't happened yet. She
suggested that the legislature has been using funds they should
not use and has been misspending.
1:52:04 PM
JENNIFER GRAHAM testified in support of the governor's proposal.
She expressed that she found the legislature's overspending the
last six years to be shameful, and she advised the legislature
needs to take a hard look and cut budgets, just like Alaskans
are expected to do at home. She said she thinks elected
officials should want the public to vote to constitutionalize
any changes, because elected officials can be voted out of
office if they do not listen to their constituents.
1:53:38 PM
BARBARA TYNDALL testified in support of HJR 7 and SJR 6, the
latter of which she thought might contain better language. She
said that she believes the [PFD] belongs to the people and needs
to be protected for future Alaskans, and she wants everyone to
stop fighting over it.
1:54:23 PM
ED COLEY testified that he is strongly in favor of protecting
the PFD. He pointed out that he doesn't spend more than he
makes. He urged for the PFD to be protected under the state
constitution for future generations.
1:55:51 PM
MARIANNE MERRILL testified that the legislators who first set up
the PFD predicted the greed of future legislators would make
them want to take the money, and so they tried to protect the
fund. She pointed out that a household can't spend more money
than it has and then asked why the state thought it could. She
questioned whether the 50/50 provision of HJR 7 would hold up
twenty years down the line because "pretty soon we're going to
want another 50/50." She encouraged the legislature to spend
less.
1:58:04 PM
DANIEL KRUEGER testified that [the PFD formula] needs to be
enshrined in the Alaska Constitution, calling it "a political
football" that has been passed around for the last half decade.
He further argued that the continued debate [about the PFD and
overspending] prevents lawmakers from addressing the real issues
facing the state. He noted that Alaska has spent through its
savings, and this could "right that ship." He continued that he
finds the current 80/20 split to be unacceptable, and that the
proposal legislation has serious merit.
2:00:06 PM
BILLY LIVENGOOD acknowledged Mr. Coons and Ms. Merrill's
testimony. He suggested that the PFD is "headed down the same
path as ... government social security." He expressed that this
money is not for state revenue; it is for state residents. He
noted that he spoke with other legislators and saw merit in [SJR
6]. He urged the legislature to reduce its dependency on the
PFD and suggested review from an independent company to be sure
[the PFD] wasn't being abused.
2:01:42 PM
RHONDA ATKINS testified in support of keeping the permanent fund
at 50/50. She stated that the legislature thinks the fund is
its own money, and that some legislators think they are smarter
than their constituents. She hopes that the legislature can
come to a nice equal deal, even though it is a bitter pill for
some, because "we're all tired of it."
2:02:48 PM
TERI STICKLER testified that she agreed with the majority of the
previous testimony from constituents. The [statutory PFD]
language was originally a fifty/fifty split, she stated, and
government has far exceeded the budgetary amount for that split.
She commented that if HJR 7 and SJR 6 are enabling factors [in
reversing that], then "we need to effectuate those as they are
written." She said that she felt it apparent that [Alaska] does
not need as many state positions and state offices as there are
currently, citing the amount of people who worked from home
during the pandemic. She then insinuated that many of the state
employees who worked remotely were not actually working, and
this has cost the state.
2:04:13 PM
KELLY GRIFFIN testified that the permanent fund is a massive
gift to the state. She said the legislature wastes funds by
arguing instead of passing a budget and suggested that PFDs are
being used to pay for special sessions. She testified that this
legislation needs to be constitutionalized to protect the fund,
and that the original statutory formula should be used. She
explained that she is very suspicious of the POMV, asking if
market value was a hard number. She said she does not
understand how market value works, and she would prefer to use
earnings in the formula, since she found it to be an easier
concept.
2:05:59 PM
RODNEY KAY testified in support of HJR 7 and opined that the
50/50 split would be fair and equitable.
2:06:22 PM
BERT HOUGHTALING testified in opposition to HJR 7 and expressed
his opinion that HJR 7 would take away the mineral rights of the
people of Alaska, which would negate the purpose of the original
creation of the PFD. He shared his understanding that HJR 7
would not protect the 50/50 split under the Constitution of the
State of Alaska.
2:08:09 PM
GAIL LIMBAUGH-MOORE testified in opposition to HJR 7 and shared
that she supports the original 50/50 split. She said that the
50/50 split has worked for many years. She expressed that Donna
Arduin was "one of the best budget directors the state has ever
seen." She shared her understanding that there are billions of
dollars sitting in accounts while legislators are saying that
the state doesn't have any money.
2:09:47 PM
ANGIE SULZER testified in opposition to HJR 7 and companion bill
SJR 6. She opined that the formula that is already in statute
should be constitutionalized, and that doing so would help
increase public trust. She stated that she does not agree with
the governor's method because she does not think it is fair or
equitable. She said she thinks that the PFD should function in
the way it was originally intended. She suggested, other ways
to address the state's fiscal situation such as investing in
industries and cutting oil credits. She shared her
understanding that a lot of people think that the state is
overspending, but she said it is not; the budget has been cut by
25 percent since former State of Alaska Governor Sean Parnell
was in office.
2:12:20 PM
ALMA CABALLERO testified that the language [regarding the
permanent fund] needs to be put in the constitution. She said
what is happening is "not right" and "we need to show it when we
vote."
2:13:12 PM
BETH FREAD stated that her main concern is that there are many
laws written into statute that are not followed by the
legislature. She said that she is supportive of the traditional
PFD format. She expressed that legislators are not giving the
people an appropriate portion of the money.
2:14:38 PM
MARIE ENGLISH testified in support of HJR 7 and shared her
opinion that the Dunleavy Administration has presented the
information is an understandable way. She suggested that the
legislators emulate Governor Dunleavy because she understands
that he is working for the people. She said that HJR 7 is not
perfect, but it is an improvement. She expressed her
frustration that this issue has been time consuming and that
there are other priorities in the state that need to be
addressed, such as education and the road system.
2:16:52 PM
TIMOTHY INGRAHAM testified in opposition to HJR 7 and expressed
that Alaska has "a lot of issues" such as the legislators not
listening to the will of the people. He said that he supports
the 50/50 split, and it is the legislators' responsibility to
ensure that the split is maintained. He spoke about his
perception of ineffective spending in the state, such as not
opening schools [during the COVID-19 pandemic] due to fear of a
"fake virus." He expressed the PFD should go back to its
original formula and that the government should not "rob Peter
to pay Paul."
2:18:58 PM
SHIRLEY MARTIN testified in opposition to HJR 7 and said that
although she supports Governor Dunleavy, she thinks that the PFD
should go back to its original formula and should be put in the
constitution. She said that she agrees with Mr. Ingraham in
that legislators have been "taking our money away from us for
the last six years." She expressed that this money needs to be
paid back and that legislators had no right to take that money.
She shared her understanding that 75 to 80 percent of the people
of Alaska need that money. She demanded that the legislators
solve the PFD issue immediately and end the special session.
2:20:10 PM
FRANCES REESE shared that she was living in Alaska when the PFD
was originally set up. She expressed her understanding that
there was a man in the legislature that took money from the PFD
to support his own interests and that that process has continued
since then. She stated that she is in favor of going back to
the original formula for the PFD. She shared that the money
from the PFD would allow people to participate in their
community as well as give to the "poor and needy."
2:22:00 PM
STEVEN OUDEAN offered a prayer, during which he expressed
support for the way the PFD was set up originally.
2:23:36 PM
ADAM HYKES opined that HJR 7 is not fair and equitable, and that
the government has "gobbled up" 50 percent of the dividend for
the past three years. He said that the PFD is treated as a
budgetary item that the legislature may or may not appropriate
according to the "boom and bust" of economic cycles. He
expressed that the PFD is not revenue and that calling HJR 7 a
protection of the PFD is a "slap in the face." He opined that
the original statute should be enshrined into the constitution
and that the government should be hands off and should not be
entrusted to be responsible [for the permanent fund].
2:25:38 PM
GARY PARSONS expressed that the PFD belongs to the people. He
said that the PFD helps the economy, the children, and the
elderly, particularly in villages. He said that he supports the
governor, but he also supports the people.
2:27:45 PM
The committee took an at-ease from 2:27 p.m. to 2:28 p.m.
2:28:33 PM
SHARLI ARNTZEN stated that she supports returning to the
original PFD formula and asked the legislature to respect the
original intent of the fund. She advised playing the "long game
as well as the short game." She also said that the state needs
to do better when budgeting.
2:30:12 PM
MARK SQUIRE testified that he has lived in Alaska since 1970 and
that he respectfully requests a return to the original PFD
formula because "the problem's already fixed."
2:31:04 PM
DANIEL HARRINGTON said that he has been in Alaska since 1997 and
believes that the government has become increasingly corrupt and
that current officeholders are distrustful; he opined that a
financial audit with "some criminality attached to it" is
needed. He said that he has done the math and that a billion
dollars a year is missing, the PFD has been robbed, and that he
has heard talk of tarring and feathering people in Juneau. He
stated that he is not making a threat but that legislators "are
like the bully on the playground and pretty soon, someday,
you're going to get popped in the snout," not by him but by
others.
2:33:20 PM
MICHELLE WILLIAMS testified that she has lived in Soldotna since
1997. She stated her belief that many people move to Alaska to
get the PFD; therefore, she recommended a tier system for the
distribution of the PFD according to how long one has lived in
the state.
2:35:46 PM
GREG COLLINS stated his support for SJR 6 but related that he
has not yet read CSHJR 7(STA). He said that he would like
Alaska residents to get "the full PFD."
2:36:35 PM
JAN DELAND opined that the state spent "so much when we were
awash with oil money" and that continued overspending is the
problem. She said she supports "keeping the current statute the
way it is" and expressed anger for "when [Governor] Walker first
stole half of the PFD." She highlighted her use of the PFD for
her children's education and talked about the "bloated"
education system.
2:38:57 PM
SUE CHRISTIANSEN testified that she opposes Governor Dunleavy's
proposal and that she hopes that the state starts taxing
corporations at a higher rate.
2:39:44 PM
MITCHELL JACOBUS opined that there are many angry people in the
state and characterized the legislature as stealing money. He
suggested that the state "go back to the way it was set up
originally" and follow the law.
2:41:33 PM
BRAULION MONTELONGO testified that he moved to Alaska last year
and that he supports Governor Dunleavy's plan because he
believes that politicians need to stop diverting funds from the
PFD. He opined that Alaskans can spend the dividend better than
the legislature can.
2:42:47 PM
LAURA BONNER stated her opposition to HJR 7 and SJR 6 because,
she opined, they divert the appropriation authority from the
legislature, preventing public services and programs from
getting needed attention. She expressed her belief that the
state government needs to have the flexibility to address
unknown challenges.
2:44:32 PM
MELODONNA CODY testified strongly in support of the governor's
proposal and stated that she would like to see the 50/50 split
constitutionalized. She stated she wanted the legislators to
end their expensive bickering and wasteful spending. She also
said that education in Alaska has declined, and the more money
the legislature spends on [education] the worse it gets.
2:46:25 PM
DR. DIANA CHADWELL testified that she and her family rely on
their PFDs. She wants the legislature to listen to the governor
and enact his PFD protection proposals. Dr. Chadwell stated
that she wants enforced restitution of previously garnished
PFDs.
2:48:47 PM
CAROL DREESZEN testified in favor of the governor's proposal,
but said she would prefer a full PFD. She stated that the
legislature has been incompetent and has misused the fund.
2:50:07 PM
ED MARSHALL testified that he was extremely unhappy with the
legislature for not working with Governor Dunleavy. He argued
that taking the permanent fund is stealing from the poor. Mr.
Marshall stated that the legislature has made no budget cuts and
has done nothing to fulfill its budgetary obligations. He
stated that he wants budget requirements constitutionalized.
2:52:27 PM
DONALD BELL testified that the legislature had to stop stealing
from people and hiding money. He spoke about the efforts of
Governor Dunleavy and opined that Alaska doesn't need big
government. He chastised the legislature for not distributing
full PFDs.
2:54:32 PM
KIMBERLY HOELSCHER declared, "Whose dividend is this? It's
mine." She emphatically stated that the PFD was not the
legislature's to spend.
2:56:26 PM
NICK MAZZOLINI testified that he supports SJR 6. He said in a
perfect world he would like to follow the original statutory
formula, but he supports the governor's plan to enshrine the
50/50 draw into the constitution. He stated that he hopes this
will "take the easy money off the table" and act as a spending
cap. Mr. Mazzolini said that the legislature couldn't
responsibly manage its portion of the earnings and should not be
allowed to spend the people's portion.
2:58:03 PM
CONNI CAREY testified that she has watched Governor Dunleavy try
to reinstate the permanent fund, and she supports his decision.
2:58:41 PM
ALEX MCDONALD testified that the legislature needs to respect
existing statutes. He noted that the 90-day session statute is
not being followed. He opined that the legislature has not been
able to effectively manage its portion of the permanent fund
earnings; therefore, he questioned why the legislature should be
allowed to mismanage [Alaska citizens'] portion. Mr. McDonald
clarified that [the dividend payout] is not a government piggy
bank. He said [the PFD] needs to be protected.
3:00:34 PM
The committee took an at-ease from 3:00 p.m. to 3:12 p.m.
3:11:57 PM
WILLIAM JOHNSON testified that oil was found in 1968 and oil
companies built the road to Prudhoe Bay and the Trans Alaska
Pipeline in two and a half years. He said, "I opposed any of
this stuff, and I think we should have a referendum or an
initiative to let the Permanent Fund Corporation develop the oil
fields."
3:13:59 PM
STEVEN CANTOR characterized the legislature as stealing money
from his children and opined that the PFD was put into the
constitution "to keep future generations of legislatures from
stealing that money to shore up a state government they were
elected to run."
3:15:06 PM
EMILY PETTITT stated her belief that the state should adhere to
the original language of the PFD and stay within the budget.
She opined that those who leave Alaska for long periods of time,
or are on military assignment, are not living as Alaskans. She
requested an end to the debates.
3:16:43 PM
MICHELLE MULLINS said that she wants to know what happened to
the PFD since the first $1,000 payment in 1982, then
characterized more recent circumstances as "rape." She then
stated her belief that legislators are well-paid, and said that
in her capacity as a State of Alaska employee she noticed that
budgets vary between departments. She opined that the
legislators are mismanaging the state.
3:19:21 PM
CRIS EICHENLAUB stated his belief that due to problems with
trust and integrity, the PDF needs to be enshrined. He opined
that "there is no reason why we can't have that money" and
characterized integrity as being "like virginity - once you lose
it, it's gone forever."
3:21:19 PM
JORDAN STEVENSON stated her support for Governor Dunleavy and
opined that the original PFD formula worked for many years and
should work now. She said that government was not created to
tax workers and create programs, and she requested that the full
statutory PFD be enshrined in the state constitution.
3:22:13 PM
NATHAN RANK expressed his support for Governor Dunleavy's
efforts to protect the PFD and opined that the PFD was "designed
to be distributed to the people, for the people, not to be
stolen from us without having any kind of vote by the people."
He recommended the PFD be reinstated to the 50/50 formula.
3:23:28 PM
SHIRLEY EMERY stated that she agrees with almost all of the
testimony heard, and said that the PFD "should go back to the
original way that they started out to be." She stated her
belief that once funds are removed, "it never stops." She
opined that a state budget is like balancing her own checkbook,
and she stated that "we'll continue to have this" until certain
legislators are voted out. She stated that she depends on the
PFD every year in order to keep her house.
3:26:28 PM
TONYA KITKA stated her support for enshrining the statutory
formula for the PFD in the state constitution and expressed
confusion regarding the information available, giving a quick
synopsis of the PFD. She stated that the calculations don't
change, so there is no reason why the PFD couldn't be paid
according to the original calculations.
3:28:58 PM
JERRY FOGG stated his support for moving the legislators to
Anchorage or "the valley" and characterized the legislators as
having parties in Juneau with no responsibility or
accountability. He said that legislators are "stealing our
money."
3:29:50 PM
TABITHA NARDINI spoke about Alaska's subsurface rights being
sold and opined that "our water, our gas, our coal, everything,
our gravel, has to be taxed." She stated her belief that the
reason for the PFD is to "make Alaska sustainable" because
farmers buy feed, heating oil, winter clothes, and provide tires
and cars. She opined that 90 percent of Alaskans need the PFD
and that it needs to be distributed in October instead of July.
3:32:24 PM
THERESA OBERMEYER expressed opposition to constitutionalizing
the PFD. She advised creative thinking and highlighted the $79
billion in the Alaska Permanent Fund. Additionally, she drew a
comparison between the Alaska Permanent Fund Corporation (APFC)
Board of Trustees and Norway's $1.3 trillion Government Pension
Fund, which was started in 1990.
3:35:22 PM
CHAD CREEGER testified in opposition to HJR 7. He said he
supports enshrining the original statutory formula in the
constitution to "stop the theft." He offered his belief that
there is a problem with government spending and urged
legislators to cut the budget.
3:36:39 PM
SUSAN HONAN expressed support for preserving the PFD's statutory
formula. Additionally, she suggested that the state repay "the
amount that was taken from the people by Governor Walker." She
offered her belief that the legislature should not have access
to 50 percent [of the statutory net income] because it was
intended for the people.
3:38:23 PM
COLLETTE BURKE stated her support for returning to the statutory
formula to calculate the dividend. She said the PFD
incentivized employees and brought talented people to Alaska.
3:38:59 PM
EDNA JOHANSON offered her belief that while operating out of
Juneau, legislators are distanced from the "every day Alaskan."
Furthermore, she maintained that when the legislature
overspends, it is taking from its fellow Alaskans. She urged
the legislature to do what's best for both present and future
Alaskans.
3:40:22 PM
TERESA SMITH expressed support for preserving the statutory
formula and for Governor Dunleavy's efforts to instate the PFD
as a constitutional amendment. She highlighted the high cost of
living in Alaska and discussed the impacts of a reduced PFD on
the poor and fixed-income individuals.
3:42:02 PM
RICHARD EVERETT said the PFD should return to its original form.
He equated paying for government services with the dividend to a
disproportionate tax on Alaskans.
3:43:11 PM}
SHARLYN COLE testified that she supports Governor Dunleavy's
plan to protect the PFD within the constitution. She said she
would like to stick with statutory formula, but indicated that
because there are lawmakers that break the law, many Alaskans
are "forced to accept something" they should not have to accept.
She expressed outrage over a legislature that feels it has the
right to break the law without consequence.
3:45:00 PM
TARA SPRAGUE said she wants the state laws regarding the PFD "to
go back to original 1964 context, that the Alaska people should
make the decision of the PFD." She said she is a single mom on
social security and disability, who is struggling because of the
decisions that have been made regarding the PFD, especially the
decision by Governor Walker. She opined that the money he took
away should be paid back to the people of Alaska. She concurred
with Governor Dunleavy's decisions regarding the PFD.
3:46:42 PM
KRISTIN CASH testified in support of a full dividend. She
talked about justification not making something right, in
relation to the decision by Governor Walker to take money from
the PFD. She encouraged the legislature to learn how to keep a
healthy budget and spend within its means. She said her family
is in Alaska to stay, and the PFD helps with the high cost of
living in the state.
3:49:03 PM
LARRY WEBB talked about the history of PFD starting as a tiered
system and being changed to a formula to return a portion of
taxes on oil to the people of the state. He opined that Alaska
should go back to original formula, because legislators cannot
be trusted not to spend the entire permanent fund.
3:51:24 PM
ELLA COTTER expressed her support of Governor Dunleavy and her
love of Alaska. She acknowledged that legislators are doing
their best and asked them to consider that the PFD helps people
live in the state. She shared some of the essentials purchased
with her PFDs over the years and how the PFD helps Alaskans live
in the state. She stated her support of "a full PFD, with
payback."
3:52:26 PM
PAGE HALL talked about the PFD belonging to the people of Alaska
and linked taking away PFD monies from the people to
homelessness and other social issues.
3:55:03 PM
JESSICA COX compared using the PFD to address budget concerns as
"taking the low-hanging fruit." She stated her support of a
full statutory PFD, and she expressed support of Governor
Dunleavy's proposal to enshrine the PFD in the constitution.
She asked legislators to consider how the PFD affects families.
3:56:55 PM
CHAD DYER testified in support of a full PFD. He encouraged
actions be taken to prevent the legislature from continuing to
"taking" from [Alaskans].
3:58:02 PM
JESSI WALTON testified in support of HJR 7. She explained that
she would actually prefer "the original 50 percent statutory
PFD" but offered her understanding that "we have a bunch of
legislators that don't know how to keep their hands out of the
coat pocket." She said she would rather see [the PFD] in the
constitution.
3:58:42 PM
WILLY KEPPEL testified in support of a full PFD and payback of
that portion which was taken from Alaskans. He talked about the
college fund his daughter has that should have more in it than
it does. He expressed support for the companion bill in the
Senate, SJR 6, as well as SJR 1, but said he is uncertain about
the wording in [CSHJR 7(STA)]. He emphasized that any mention
of "may pay the PFD" should be changed to "shall pay the PFD."
He indicated the money is there.
4:01:11 PM
KENNEDY SERR testified that the people of Alaska should decide
and the annual debate about the PFD should be put to rest. She
stated support of HJR 7 and SJR 6 and encouraged a bipartisan
solution.
4:02:24 PM
SAM ALBANESE testified in support of Governor Dunleavy's
proposal to amend the constitution in order to protect the PFD.
He opined, "We don't have a revenue problem; we have a spending
problem."
4:02:53 PM
RENEE WELLINGTON testified in support of paying the full PFD
this year and putting the original permanent fund formula in the
constitution. She talked about the money that trickles back
into the economy from the PFD, and she said each time the PFD
has been decreased, it has not been done legally. She opined
that the testimony on this topic has illustrated that [the
legislature] has "poked the bear and you're getting bit."
4:04:44 PM
VERN NUSUNGINYA testified in support of the governor's proposal
on the PFD. He emphasized that the PFD is "the people's money"
and is good for the state's economy.
4:05:45 PM
JEAN HOLT testified in opposition to HJR 7 as legislation that
"would steal our PFD forever." She said she supports SJR 1 and
SJR 6.
4:06:38 PM
CLAYTON TROTTER offered his understanding of the history of the
dividend, including that private properties were taken and given
to the state and federal government, and the idea was to share
the monies made with the people via a dividend. He said his
move to Alaska for a job included bargaining related to his pay
and there being a dividend, but when he got here the dividend
was cut in half. He said that is fraud. He stated, "Quit
defrauding the people, please."
4:09:19 PM
CINDY HUDGINS testified in support of the original PFD formula
and reimbursement of that which was taken from Alaskans. She
questioned why this is a continuing issue, and expressed
appreciation for Governor Dunleavy's fighting for the people of
Alaska despite "running into brick walls." She said crooked
politicians forget they work for the people; and Governor Walker
found a loophole regarding the PFD. She urged protecting the
PFD under the constitution so that this is never again an issue.
4:10:53 PM
BEAU CORK testified in support of HJR 7 and SJR 6, and in
support of Governor Dunleavy. He acknowledged the work the
legislature does on the budget. He mentioned the poor in Alaska
and the effects of the pandemic on people. He said he thinks
increasing the PFD would result in money poured right back into
the economy.
4:12:34 PM
NANCY CARTER, JR opined that what Governor Walker did was wrong,
and the money should be given back to the people. She praised
Governor Hammond for his role [in establishing the PFD] and
supported a return to the original formula. She added that if
Governor Dunleavy "can do what he can do" it would be "a good
thing." She said she agreed with the prior testimony of Ms.
Kitka.
4:14:58 PM
DEBBIE CUSTIS said she lives in Texas, not Alaska, but lived in
Oregon, where she said the people used to have "a kicker" but
the legislature stole it from them. She expressed respect for
Governor Dunleavy, accused legislators of stealing from the
people, opined that what Governor Walker did was not right, and
urged the return of the money to the people of Alaska.
4:17:24 PM
ROBERT "ROB" GEESEN testified that he is a senior living on $866
a month. He expressed his hope that the PFD will be enshrined
in the constitution, preferably in the original formula. He
suggested that if the legislature does not want to do this, then
perhaps it is time to put the issue before the people on the
2022 ballot. He further suggested addressing a budget deficit
by suggesting equal cuts to all departments and leaving those
agencies to figure out where to trim "the pork."
4:19:27 PM
JAMES GREENE, JR suggested a 10-year waiting period for
immigrants to Alaska to get a PFD so that the dividend will last
longer.
4:20:40 PM
LINDA LANCE supported putting the PFD back into the state
constitution "as it originally was." She said seniors on
limited income use PFD money to secure their futures. She said
the money the legislature wants to use is not the legislature's
money to use. She said she agrees that if legislation cannot
provide for a full PFD, then the issue should be put to a vote
in an election.
4:22:39 PM
ADEZE WOKO expressed support for the governor's proposal
regarding the PFD. She remarked on the helpfulness to her
family in receiving the PFD.
4:23:47 PM
CHAIR CLAMAN closed public testimony on HJR 7.
4:23:53 PM
CHAIR CLAMAN announced that HJR 7 was held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HJR 7 v. B 5.10.2021.PDF |
HJUD 5/24/2021 1:00:00 PM HJUD 6/2/2021 1:00:00 PM |
HJR 7 |
| HJR 7 Transmittal Letter 1.19.2021.pdf |
HJUD 5/24/2021 1:00:00 PM HJUD 6/2/2021 1:00:00 PM |
HJR 7 |
| HJR 7 Sectional Analysis v. B 5.24.2021.pdf |
HJUD 5/24/2021 1:00:00 PM HJUD 6/2/2021 1:00:00 PM |
HJR 7 |
| HJR 7 Testimony Received by 5.24.2021.pdf |
HJUD 5/24/2021 1:00:00 PM |
HJR 7 |
| HJR 7 Fiscal Note OOG-DOE 1.8.2021.pdf |
HJUD 5/24/2021 1:00:00 PM HJUD 6/2/2021 1:00:00 PM |
HJR 7 |
| HJR 7 PowerPoint Presentation 5.24.2021.pdf |
HJUD 5/24/2021 1:00:00 PM HJUD 6/2/2021 1:00:00 PM |
HJR 7 |