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Alaska Supreme Court to Rule on PFD Lawsuit

by the University of Cincinnati

The PFD or Permanent Fund Dividend pays Alaska residents money every year from a permanent fund that distributes money from oil royalties. Three current and former politicians are suing the state in an effort to force companies to pay what they think is owed to the dividend fund so that the money can be sent to Alaskans. 

An Overview of the PFD Lawsuit

Democrats are suing regarding Governor Bill Walker’s veto, based on their opinion that his veto of half of the 2016 PFD was illegal and should be overturned. It was done in response to Governor Walker’s veto of an appropriations bill that would have authorized a transfer of almost seven hundred million dollars issued by the APFC in place of the full $1.3B dollars that was originally due.

The Governor’s Reasoning

Governor Walker struck a line through a particular section and slashed the amount by half. This amount would result in an estimated thousand dollar payment to every resident that was eligible. He says that he reduced the APFC liability as an attempt to ensure the program continues instead of being depleted in an era of lower oil prices.

Under statute 37-13-145, 50% of the income that is available from the earnings reserve should be transferred to the state’s dividend fund when the fiscal year ends.

The people who filed the lawsuit are citing these rules to demand more money be transferred for subsequent distribution to the public.

The History of the Case

In August 2016, Senator Wielechowski sent a letter to the CEO of the APFC asking if the corporation would transfer not the amount the Governor had the power to authorize be transferred but the amount mandated by the Alaskan Constitution.

The case was filed by current state senator Bill Wielechowski and two former state senators. The civil lawsuit was filed on September 16, 2016. There is no criminal case as would be heard by a graduate with a masters in criminal justice, though those with online CJ degrees could become mediators in smaller, similar disputes.

Alaska State Senator Bill Wielechowski argued in front of Alaska superior court in November 2016 that the Governor’s veto should be overturned. They lost that appeal, but they then appealed to the Alaska Supreme Court. The case is set to be heard by the Alaska state Supreme Court.

The Implications of the Case

At its heart, this is a dispute between various branches of government as to whether the PFD payments are an appropriation set by the legislature the governor can alter or set in stone based on existing legislation.

If these Democrat politicians win the case, the immediate result is a larger necessary transfer to the PFD. The long term implication is that allocations to the Permanent Fund are an exception to anything the governor controls. If they win, no Governor could affect payments to the PFD or from it. This does raise the risk that payments from the fund in excess of incoming revenue could deplete it, which was one of the concerns the Alaskan governor cited. Expect to read about cases like this when earning an online MSCJ degree.

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