Dividend Protection Hindered by Spending Cap Rider JUNEAU – House and Senate Democrats today called on the Senate Finance Committee to remove a provision added by the Senate Judiciary committee that would make constitutional protection of the Permanent Fund Dividend contingent on the passage of a constitutional spending cap. "These are two separate issues. One should not be contingent on the other," said Senator Georgianna Lincoln (D-Rampart), sponsor of dividend protection legislation. Lincoln’s Senate Joint Resolution 19 protects the current Permanent Fund dividend program in the constitution and requires a majority vote of the people before the Legislature may spend any excess Permanent Fund earnings. "I’m focused on dividend protection. We don’t want the people to have to vote for an unrelated, unspecified constitutional amendment just to protect their dividend," said Representative Eric Croft (D-Anchorage), co-sponsor of HJR3, the House version of SJR19. "The spending cap rider may prove to be cement shoes for dividend protection." According to a legal opinion obtained March 2 from Legislative Legal Services, "...the addition of the contingency in CSSJR19 (JUD) increases the risk that the court will find the proposal to be so extensive as to amount to a revision to the state constitution, and, therefore, beyond the power of the legislature to propose." "By adding this provision, the Judiciary Committee put the voters in an unfair position and put the entire amendment to protect the dividend in legal trouble," said Croft. The legal opinion states that adding the contingency provision increases the risk that the entire constitutional amendment will be found unconstitutional. In the 1999 case Bess vs. Ulmer, the court held that the legislature could propose amendments to the constitution that involve only one subject. The legal opinion states that dividend protection and a spending cap may be acceptable as stand-alone measures, but a resolution with both runs the risk of constitutional problems. Senator Ralph Seekins (R-Fairbanks), chairman of the Senate Judiciary Committee, moved a newly amended SJR19 with the spending cap rider on February 27, a year after the resolution was referred to his committee. The three Republicans on the committee voted to add the new provision and the two Democrats voted against it. ###
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