The Senate Finance Committee approved its version of the state operating budget Saturday afternoon with a provision for a $1,000 Permanent Fund Dividend to be paid later this year. House Bill 205, the state operating budget that also includes certain capital appropriations, passed the House earlier.
As it stands, the bill would pay for the PFD with a $680 million appropriation of state general fund revenues, which will add to a projected $500 million deficit for FY 2021.
The increased deficit could further deplete funds in the Constitutional Budget Reserve or, more likely, cause an additional draw on the Permanent Fund's Earnings Reserve Account. This would be in addition to the amount drawn from the earnings reserve for the annual Percent-of-Market-Value, or POMV payment to support the state budget.
The amount of an additional earnings reserve draw is unknown at this time but it could reach several hundred million dollars.
There were divided opinions over the $1,000 PDF: Sen. Natasha von Imhof, cochair of the committee, objected to a payment of a PFD this year given the state's difficult revenue situation. Sen. Bill Wielechowski, D-Anch., proposed a special emergency $1,000 dividend tobe paid in June, earlier than the normal autumn payment.
An amendment to HB 205 by Wielechoski to create the special emergency dividend failed in the Senate committee.
The bill is now in the Senate Rules Committee awaiting placement on the calendar for approval by the full Senate. The House must agree to the Senate's changes in SB 205 including the PFD amount.