Last Updated October 12, 2019.
Note: This page will be updated in real time as any new information about the PFD becomes available each year including dates and times of any announcements.
Does this page look familiar? That’s because it probably is. I’ve been updating this PFD information page since 2008. As a life-long Alaskan, the PFD is, of course, on my list of interests. As a website owner, I thought, what the heck, why not add a news and update page for the PFD? At the very top of the page you’ll always see a “last updated” message to verify all info is current and from this year.
When will the 2020 PFD be announced?
The amount of the Alaska permanent fund dividend is usually announced in mid-September, typically the 18th to 22nd sometime, but since 2017 there has not been an announcement. Just a randomly appearing note on the PFD division website.
What’s happening with the PFD? How did it get cut?
As the state faces a budget “crisis,” attempts to restructure the PFD program to fund the government continue.
Former Governor Walker’s push for the PFD began with SB128 in 2015, which passed in the Senate, but failed to pass in the House and was deemed “dead” as the session ended. However, Walker was bent on cutting into the PFD…
In June 2016, he vetoed a portion of the PFD funding on the state budget limiting the 2016 PFD to $1,000. That had never been done before, but any veto can be overridden by the legislature with a majority vote. None the less, they did not use that power, and the veto stood.
There was a court case filed by Bill Wielechowski, along with former Republican Alaska Senate presidents, Clem Tillion and Rick Halford, which attempted to challenge the legality of this veto. A verdict was awarded in the State’s favor by Judge William Morse. Wielechowski filed an appeal with the Supreme court, but the verdict upheld the superior court’s decision.
Walker’s 2017 budget proposal included a new (nearly identical) bill to SB128. This, and other bills like it, struggled for passage, and remained undecided as the legislative session (and extensive special sessions) came to a close. Regardless, the operating budget did pass in both the House and Senate. This budget capped 2017 PFDs at $1,100. Walker’s 2018 budget proposal continued to push his agenda with SB26.
On May 8, 2018, SB26 passed the legislature. This bill caps withdrawals from the fund at 5.25 percent before dropping to 5 percent in 2021. It does not alter the way the PFD is calculated.
Walker withdrew from the 2018 gubernatorial election, and our new Governor, Mike Dunleavy, took office December 3, 2018.
In 2019, Dunleavy presented a drastically reduced budget, which the legislature ultimately rejected almost entirely instead using Walker’s previous budget proposal. After a budget debate that nearly shut-down the state government, the legislature eventually submitted a budget compromise that did not include a PFD at all, suggesting the 2019 PFD would be placed in a separate bill. That budget was signed by the Governor with extensive vetoes.
The PFD became a major political issue as many sources began to sell the narrative that the large budget vetoes issued by Dunleavy were “to pay a bigger PFD,” despite the PFD and budget being separate issues.
Lawmakers were called to a special session focused solely on the PFD in July 2019. This session was set to occur in Wasilla by the Governor, but a portion of the legislature chose to meet in Juneau. As a result, 37 members were present in Juneau, and 21 in Wasilla. While neither meeting had the 45 members required to pass legislation, a vote was held regarding the budget vetoes in Juneau, which of course failed to pass due to a lack of members. The Governor later moved the special session to Juneau and added the capital budget to its scope.
HB2001, which reversed a great deal of the budget vetoes and included the PFD, was the result of that session. While the exact amount of the PFD was not set in HB2001, the total amount for all PFDs was, which resulted in a payment of $1,606 per person. According to the Department of Revenue, had the traditional formula been followed, the PFD would have been $2,910. Dunleavy could have vetoed the PFD funds and continued to fight for the full amount, but this would have resulted in a late or no payment of the 2019 PFD.
Given this, on August 19, 2019 Dunleavy premiered a video in which he stated he would not veto the PFD from HB2001. He also stated he will continue to fight for the remaining funds in another special session.
The special session that Dunleavy mentioned does not yet have a start date as it is pending the filling of Senate seat M. Meanwhile, the PFD work group established under HCR101 has begun meeting to discuss the future of the fund. You can view information provided to that committee, watch meetings, and more at the PF Working Group website.
What about the PFD back pay?
Dunleavy ran a campaign which focused heavily on the PFD with promises to not only restore the previous calculation method and ensure it’s followed in the future, but also to return funds withheld in prior years. When this back pay would be delivered (should it actually be paid) is also not clear, but an interview with Dunleavy stated any sort of payment couldn’t be done without legislative action. Dunleavy does not have the power to issue back pay without legislative approval.
It appears the first step in this process was made in the Senate by Senator Bill Wielechowski who filed two bills aimed at backpaying past withheld dividends and enshrining the traditional calculation method in our constitution pending voter approval. The downside of the current back pay bill as written (SB13) is that it aims to provide a supplemental dividend that would be paid only to those who qualified from 2016 to 2019 (every year). Some may see this as unfair, as, for example, someone who forgot to file in say 2017, would be ineligible.
Alternately, shortly after Wielechowski, SB23 and SB24 were filed in the Senate at the request of Dunleavy. These bills would pay back prior year withheld dividends over a three year period. In 2019, an additional $1,060 would have been paid (for 2016), in 2020 an additional $1,289 (2017), and in 2021 an additional $1,328 (2018). To be eligible for each payment you would need to have been eligible in the year the back pay was for and the current year (example/ to receive 2018’s back pay you would need eligibility in 2018 and 2021). These payments would total $3,678. The primary difference between SB13 and SB23/24 is that SB13 pays a single lump sum while SB23/24 pay out over 3 years.
Despite both efforts, this is definitely a “don’t count your chickens” scenario. A bill is just a bill and many fail to pass every year. All the current back pay bills saw virtually no action in 2019, and are currently still in committee. Obviously, being SB23/24 previously included a 2019 payment, and there would now be another year of back pay, both of these bills will need amended or replaced.
SJR5 is a bill proposed by Dunleavy to guarantee the PFD in the Constitution. While going through the motions in the Senate, it was amended to split the PFD payment into quarterly installments (so four times a year) in an effort to keep spending more in-state. This bill is still in committee and has yet to pass in either the Senate or House.
How much would have the 2016 to 2019 PFDs have been without the cap?
As many of us know, the PFD amount is usually calculated using the last five years of the fund’s returns by:
-Adding the fund’s Statutory Net Income from the last 5 years.
-Multiplying by 21%.
-Dividing by 2.
-Subtracting the prior year obligations, expenses, and PFD program operations.
-Dividing by the number of eligible applicants.
Below are the statutory net income numbers which should be used to calculate the PFD:
(expressed as millions rounded)
FY 2012 1,568-dropped off in 2017.
FY 2013 2,928-dropped off in 2018.
FY 2014 3,531-dropping off in 2019.
FY 2015: 2,907-dropping off in 2020.
FY 2016: 2,198
FY 2017: 3,214
FY 2018: 6,324
FY 2019: 3,305
FY 2020: TBA
As low years have fallen away, the fund should have offered high returns for residents over the next few years.
Just how high?
As it stands the PFD cuts have cost Alaskans about $5,037 per person– a major blow to families with kids. PFD estimates for the last 4 years are as follows:
2016: $2,083 vs $1,022 paid
2017: $2,390 vs $1,100 paid
2018: $2,982 vs $1,600 paid
2019: $2,910 vs $1,606 paid
In February, 2019 as part of a presentation to the Senate State Affairs committee, the Alaska Department of Revenue also released the following graph. It shows PFD projections for the next 10 years based on expected returns if back pay was not paid (orange) and if it were (blue). By “status quo” they mean by the standard calculation method without caps. As you can see, this puts PFDs estimated at over $3,000 per year for the next decade–assuming no legislative action somehow derails things.
Also note, since certain news stations have spun this as “back pay=lower future PFDs.” Take a good look at this graph. Though it is true future PFDs would be slightly lower, cumulatively, residents would receive more total between FY20 and FY29 with the back pay and get a larger chunk of it right away. None of the Senate documents contained the actual amounts used in the graph, but being each step is $500, the differences from FY23 to 29 can’t be more than $100 to $200, yet the difference between FY20 to 22 with back pay is $1,000+ each time. This means while back pay would mean losing less than $1,500 over 7 years, not paying back pay costs Alaskans more than double that at $3,733 over 3 years.
A second PFD projection table was presented to the Senate Finance Committee in April to show what enacting SB103 would mean for the PFD amount and public service funding. SB103 would change the way the PFD is calculated. This bill would split the 5.25 percent draw taken via SB26 50/50 with 50 percent going to the state, and 50 percent going to PFDs. That would eliminate the use of the long-standing traditional five-year average method currently being ignored. SB103 is stuck in committee at present and won’t likely see any more action until next year. This table also projects PFD’s to stay above $3,000 through FY2028 (if SB103 does not pass, “1982 Formula” is the current 5-year average approach).
The 2019 Alaska Permanent Fund Dividend began disbursement October 3rd for applicants who filed online. If you filed a paper application, even if you selected direct deposit, your PFD will be sent October 24th.