Dunleavy moves to lock Permanent Fund dividend into Alaska Constitution, setting up showdown with anti-PFD Legislature

By SUZANNE DOWNING

Jan. 24, 2026 – Gov. Mike Dunleavy has introduced a constitutional amendment that would permanently lock Alaska’s Permanent Fund dividend formula into the state constitution, setting up a high-stakes political battle with a Legislature controlled by lawmakers who have historically opposed fixed dividend guarantees.

The proposal, House Joint Resolution 30, would amend multiple sections of the Alaska Constitution to require that 50% of the annual draw from the Alaska Permanent Fund be paid directly to eligible residents as dividends, with the remaining 50% used for government operations. The plan would constitutionally enshrine a structured 5% draw on the fund’s average market value and split that revenue evenly between Permanent Fund dividends and state services.

Currently, Alaskans are only receiving about 17% of the statutory dividend formula that is in law, because the Legislature strips their dividends every year to pay for programs.

Under the governor’s resolution, the Legislature would be allowed to authorize withdrawals from the fund of up to five percent of the average fiscal-year-end market value for the first five of the preceding six years, a framework similar to the existing Percent of Market Value (POMV) system, but with a key difference: the dividend portion would no longer depend on legislative appropriation or annual political negotiations.

Instead, the constitution would mandate that half of that draw be distributed automatically to eligible Alaskans.

“The payment of dividends under section 15 of this article shall be made without appropriation,” the resolution states.

The remaining portion of the draw would be available for core state functions, including public safety, education, transportation, and other government operations.

Wrangling over the size of the dividend has consumed the Legislature ever since Gov. Bill Walker vetoed half of the dividend in 2016.

In a statement posted on X, Dunleavy framed the proposal as a permanent solution to years of political conflict over the dividend.

“Today I introduced a constitutional amendment ensuring every eligible Alaskan receives a PFD,” Dunleavy wrote. “Half the annual draw from the permanent fund will be used for the PFD, the other half for essential state services like public safety, education, and transportation infrastructure. Urge your legislators to place this important amendment before voters this fall.”

The resolution also includes a major structural change to the fund itself: the elimination of the Earnings Reserve Account as a separate entity. Under the transition language, the unencumbered balance of the earnings reserve would be deposited into the Permanent Fund principal on June 30, 2027, permanently folding earnings into the constitutionally protected corpus of the fund.

The changes would take effect for fiscal year 2028 and beyond, assuming voter approval.

If passed by the Legislature, the amendment would go before voters at the next general election.

Politically, the proposal faces steep odds. The Alaska Legislature is currently controlled by a Democrat-controlled majority coalition that has repeatedly resisted efforts to constitutionally guarantee a dividend formula, arguing that fixed payouts limit legislative flexibility in managing state finances and budgeting priorities. Many of the same lawmakers have supported using Permanent Fund earnings more heavily for government spending rather than dividend distributions.

Dunleavy, by contrast, has consistently argued that the dividend is not a discretionary program but a property-right-style benefit owed to Alaskans, rooted in the original purpose of the Permanent Fund. His administration has repeatedly pushed for formula-based payouts and constitutional protections, framing the issue as one of public trust and fiscal discipline.

Because HJR 30 is a constitutional amendment, it cannot be vetoed by the governor, but it must receive a two-thirds vote in both legislative chambers to advance to the ballot, a threshold that will require support from lawmakers who have historically opposed locking in dividend formulas.

If the Legislature refuses to advance the resolution, the proposal will stall without ever reaching voters, keeping the dividend subject to annual political negotiation.

The bill now sets the stage for a clear confrontation: a governor seeking to constitutionally guarantee the Permanent Fund dividend versus a Legislature dominated by members who have consistently resisted making the PFD untouchable.