"It's the last place we should be going to get money," Halford said in a news conference at the Anchorage courthouse, saying he preferred higher taxes on the oil industry and an individual income tax."

There is a fundamental disconnect here. The PF is not a trust. The Dividend is not an individual entitlement. It is taxed by the IRS (and thus will also be by the State) at your highest marginal rate. So how do we make up for this lost revenue? More taxes? Are they arguing the only purpose for the PF is to produce annual Dividends? Flawed logic it seems. 

Read for yourself Article 9.15 from the State Constitution: "All income from the permanent fund shall be deposited in the general fund unless otherwise provided by law".