Last Updated April, 2019. A bill to change the PFD calculation has been introduced in the Senate. The Senate Finance Committee has also finished its budget draft, which would set the PFD at $1,400.
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 2019 PFD be announced?
The amount of the Alaska permanent fund dividend is usually announced in mid-September, typically the 18th to 22nd sometime, but in 2017 and 2018, there was not an announcement.
At random, on September 4, 2018, the PFD division website began sporting the message below– just a quick note that the 2018 PFD was $1,600. This was similar to the routine in 2017, though the message appeared Sept 14. As a result, it’s unknown if an announcement will be made in 2019. This likely depends on how things play out in the current legislative session.
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 SB 128 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 SB 128. 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 SB 26.
On May 8, 2018, SB 26 passed the legislature. This bill allows part of the PFD to be used for government and caps withdrawals from the fund at 5.25 percent for the next three years before dropping to 5 percent. The current PFD statutory formula will be used to calculate PFDs, but the government’s draw and the PFD are calculated in the “total” draw. As a result, in the future, legislatures and governors may take funds for government first, giving the people the scraps in PFD form (clearly, your author thinks this bill is a bad thing, no unclear bias here).
Walker withdrew from the 2018 gubernatorial election, and our new Governor, Mike Dunleavy, took office December 3, 2018. 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.
In April 2019, SB 103 was proposed to change the way the PFD is calculated. This bill would split the 5.25 percent draw taken via SB 26 50/50 with 50 percent going to the state, and 50 percent going to PFDs. This bill would eliminate the use of the long-standing traditional five-year average method currently being ignored.
How much will the 2019 PFD be?
The first estimate for the 2019 PFD was a quote for a full PFD along with “backpay” for past withheld funds at $6,700. As the withheld amount is currently estimated at $3,733, this would imply the 2019 PFD may be around $2,976 without back pay. This figure was supported in Dunleavy’s FY2020 budget, which funded a full PFD at $3,000, as well as in Dunleavy’s budget forecast effects report released in March that put the PFD at $2,988.
When this backpay 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. The current session started January 15th. It has been stated that backpay will require a different appropriation or bill. As a result, it is not reflected in the released budget. To be clear, the lack of the backpay’s inclusion in the budget submitted does not mean backpay will not be paid.
It appears the first step in this process was made in the Senate by Senator Bill Wielechowski (D-Anchorage) 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 backpay bill as written (SB 13) 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, SB 23 and SB 24 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 be 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 SB 13 and SB 23/24 is that SB 13 pays a single lump sum while SB 23/24 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. In this case, only time will tell– in regard to the 2019 PFD amount, whether it will be a full PFD, and the status of past withheld funds.
Unfortunately, things are not looking good in that regard, as the House finance committee appears to be rejecting Dunleavy’s budget and favoring a static budget with a substantial cut to the PFD to cover the deficit. Under one estimate of this plan, as detailed by the Govenor’s Office, the 2019 PFD would be $588, dropping further to $234 next year for the 2020 PFD. The Senate Finance Committee completed a budget draft in early April that would set PFDs at around $1,400. This version of the budget still requires approval from the House floor. It’s unlikely it will stay in it’s current form.
If SB 103 were to pass (the proposed 50/50 split with the government which would change the way the PFD is calculated), the 2019 PFD would be roughly $2,343.
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 2018 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
FY 2016: 2,198
FY 2017: 3,214
FY 2018: 6,324
FY 2019: Projected at $3,872 (this number will be released 7/1/2019)
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 $3,733 per person– a major blow to families with kids. PFD estimates for the last 3 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
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 backpay 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 3K per year for the next decade–assuming no legislative action somehow derails things.
Also note, since certain news stations have spun this as “backpay=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 backpay 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 backpay would mean losing less than $1,500 over 7 years, not paying backpay costs Alaskans more than double that at $3,733 over 3 years.
The 2018 Alaska Permanent Fund Dividend was disbursed October 4th. The 2019 PFD filing period is now closed.