Dunleavy's grandstanding on dividend falls flat

Gov. Mike Dunleavy, on the run from the recall, introduced a bill Wednesday to add $815 million to the state deficit by giving Alaskans an additional $1,304 in Permanent Fund Dividends for last year.

This costly bit of grandstanding has no chance of becoming law. Dunleavy is just trying to buy himself a few headlines, but most Alaskans will see through it.

His press release included a mistake in the range of nearly $8 billion. Dunleavy said the “earnings reserve account’s current balance is $18 billion,” as if to suggest that $18 billion can be spent.

Of that amount, $7.7 billion has already been committed and can not be spent twice. Given the market risks and the reality that a balance has to be preserved to deal with downturns, no one who is serious about the governor’s job would make a proposal like this one.

Dunleavy should be telling Alaskans how he intends to deal with the $1.5 billion deficit has has proposed for the next fiscal year, which would leave the state with no reserves outside of the Permanent Fund by the fall of 2021. But that is a difficult problem and one which he is ignoring. It’s almost as if he has taken a vow of silence on any serious political proposal.

We can be glad that a majority of legislators, both Republicans and Democrats, are showing a level of fiscal restraint that is missing from the Dunleavy administration. Recklessness is not going to repair his political reputation.

The only legislators who will support this either don’t understand the state’s financial situation or don’t care.

In the long run, Dunleavy and people like him are the biggest threat to the fund and to the dividend.

Dunleavy’s plan contradicts the law approved in 2018 that limits withdrawals from the fund to 5 per cent.

It is not by coincidence that on the same day, the state House introduced a resolution warning that an excessive withdrawal to pay more money to Alaskans today puts the fund and the economy at risk. It also puts the continuation of vital state services at risk.

“We reject the idea that most people would take from future generations just so we can receive the largest PFD in history today,” said House Speaker Bryce Edgmon.

Unlikely the Dunleavy grandstanding plan, the resolution is likely to pass.