Permanent Fund Corporation. Foto / Photo: Archive

Alaskans will not get the rest of the PFD in December
Senator wielechowski plans appeal
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 By Dayra Valades

On June 29, Governor Bill Walker vetoed $1.29 billion of the state’s budget. One effect of this cut was to reduce by more than $1,000 the amount that Alaska residents receive annually from the Permanent Fund Dividend (PFD). This cut has the largest impact on families with the lowest income. 

In September, the Republican majority of the Alaska State Legislature decided not to override the veto of the governor, which effectively approved the PFD reduction. The Democrats tried to oppose this move, but then-Senate Majority Leader John Coghill ruled the motion out of order. Some weeks later, the residents of Alaska received the PFD with the reduced amount. 

Questions began to arise: does the governor have the power to veto the PFD? Would the residents of Alaska ever receive the rest of the money? What will happen to the PFD in the future? 
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“My initial thought was: ‘Governor Walker has a very strong veto power’,” said Democratic Senator Bill Wielechowski when interviewed by Sol de Medianoche. He was contacted by people who were present in 1976 when the constitutional amendment that created the Permanent Fund was passed. They told him this veto was not legal. Joined by Rick Halford and Clem Tillion, Wielechowski began to research the Legislature’s resolution. They gathered the minutes of the milestone legislative sessions in which the Permanent Fund and the Permanent Fund Corporation took shape. Going through that material, they discovered that the Constitution designates the PFD as a dedicated income stream, and as such it should not be considered in the state’s budget. 

During his research, Senator Wielechowski found Hickel vs. Copper, an Alaska Supreme Court case heard in 1994. The Court found that by law the Permanent Fund Corporation “shall transfer the funds” from Earnings Reserve account to Dividend Fund. The Supreme Court said that this is an automatic transfer and that the money is then not subject to appropriation. Thus, the PFD is not part of the budget, and the Governor has no ability to veto it. 

Armed with this finding, Wielechowski, Halford, and Tillon sued the Permanent Fund Corporation, claiming it had violated its statutory obligation to transfer the money. In response the Corporation argued: “We relied on the Governor’s veto.” But plaintiffs argued that it “should have transferred the whole amount. You have to transfer the rest.” 

According to Senator Wielechowski, this is a complex case that could take two or three years to solve, but the plaintiffs are hoping to complete the process in six months. A Superior Court Judge agreed to expedite the trial on the request of the plaintiffs and the State. There was a court hearing on November 17, at which both sides made their arguments before the judge. After hearing them, Anchorage Superior Court Judge William Morse dismissed the lawsuit presented by Wielechowski. He held that the Governor has broad veto powers that allow him to cut this year’s Alaska Permanent Fund Dividend in half. 

Wielechowski says his team will appeal this decision, so the interests of the neediest families in the state could soon be discussed in the Supreme Court. But Alaska residents will not see the rest of the PFD in December.