A superior court judge has upheld the Governor of Alaska’s decision to halve the amount of the state’s annual social dividend payment in 2016.

As previously reported in Basic Income News, Alaskan senator Bill Wielechowski filed a lawsuit in which he contested Governor Bill Walker’s veto of about half of the funding that the state legislature had allocated to the state’s Permanent Fund Dividend (PFD) and asked the courts to require that the Permanent Fund Corporation transfer the full amount originally allocated to the PFD.

Walker vetoed the funds in June 2016, in the face of a mounting budget crisis in the state, and Wielechowski filed his suit in September. On November 17, Superior Court Judge William Morse dismissed the case.

The Alaska Permanent Fund was established in 1976 by an amendment to the Alaska State Constitution that mandated that at least 25% of the money earned from the state’s oil be placed into a permanent fund, enabling the state to share its profits from non-renewable resources with future generations of Alaskans. In 1980, the Permanent Fund Corporation was created to manage the fund. Financed from the investment earnings on the permanent fund, the PFD is a cash payment distributed annually to all permanent residents (including children). The PFD is well-known in basic income circles as a “real world” example of a basic income–a universal and unconditional cash transfer to individuals. The PFD reached its peak amount of $2,072 in 2015, and it would have stood at $2,052 in 2016 had Walker not vetoed the legislature’s budget. Instead, this year’s PFD is $1,022 per Alaskan resident.

In previous years, the transfer of money from Permanent Fund Corporation to the fund for the dividend has been routine and uncontested.

In his suit, Wielechowski charged that Walker violated a law (Alaska Statute 37.13.145) that states that the Permanent Fund Corporation “shall” transfer half of its available income to the fund for the PFD. On Wielechowski’s interpretation, this statute implies that the transfer of funds is “automatic” and thus not subject to veto by the governor.

Morse argued, however, that the amendment setting up the Permanent Fund did not specify that it would affect the governor’s power of veto, saying to Wielechowski, “You’re telling me that what they secretly were trying to do was eliminate the governor’s veto authority, but they never mentioned that?”

Wielechowski has said that he will appeal the decision to the Alaska Supreme Court.

References

Alaska Dispatch News (November 17, 2016) “Judge tosses lawsuit challenging Alaska Gov. Walker’s PFD veto” Alaska Dispatch News.

Andrew Kitchenman (November 17, 2016) “Judge upholds Walker’s veto halving Permanent Fund dividends” KTOO Public Media.

Alaska pipeline photo CC BY 2.0 Maureen