The Alaska House of Representatives approved an operating budget that includes a $1,400 per capita subsidy from the Permanent Fund and projects a deficit close to $450 million for the next two fiscal years. The proposal, which now goes to the Senate, prioritizes school funding and state services, despite the complicated fiscal outlook.
The document incorporates a one-time increase of $253 million for education, subject to the non-approval of a permanent increase to the stimulus payments program and other needs. For two days, cut amendments proposed by Republicans were debated, but most were rejected by the Democratic majority. Legislators pointed out that balancing the accounts will be the responsibility of the Senate.
$1,400 stimulus checks approved for eligible families
The budget includes $1.6 million for five additional security officers, $1.5 million for adult disability day services, and $10 million for the Marine Highway System. “We all deserve more, but we are in an unprecedented fiscal quagmire,” said Rep. Andy Josephson, administrator of the plan.
A controversial $79 million unallocated cut raised tensions. This would force Governor Mike Dunleavy to decide on reductions without legislative guidance. Lawyers warned that the measure could be unconstitutional. Without this adjustment, the deficit would exceed $500 million when including other planned expenses.
Budget for PFD stimulus checks approved, but with changes
The budget was approved with 21 votes in favor and 19 against, supported only by the Democratic majority. The Republican minority criticized the lack of action to reduce the deficit. Fairbanks Rep. Will Stapp called the plan “a fiscal mirage” that avoids difficult decisions.
Josephson defended the document, pointing out that state services already face cuts after years of flat funding. “We are in the bone,” he said, questioning possible additional reductions. The text includes funds for education, school maintenance, child care and food benefits.
On Monday, the House authorized withdrawing $2.8 billion from state savings to cover deficits, then requiring support from three-quarters of both chambers. The Republican minority could block this measure, according to DeLena Johnson, Palmer’s representative. Legislators warned about the risks of relying excessively on reserves.
Senate leaders rejected the unallocated cut and use of savings. Instead, they proposed increasing taxes on oil, an initiative with a low probability of approval in the House. Bert Stedman, co-chair of the Finance Committee, anticipated “difficult decisions” before May.
What is the Alaska PFD stimulus program?
The Alaska Permanent Fund was established in 1976 by constitutional amendment. Its goal is to preserve a portion of the state’s oil revenue for future generations. The funds are invested in various assets (stocks, bonds, real estate), and their returns finance the PFD and, partially, government spending.
The annual dividend has been paid to eligible residents since 1982. The amount is traditionally calculated based on a moving average of the fund’s returns over five years. However, since 2018, the Legislature defines the annual payment through budget negotiations, prioritizing fiscal needs over the historical formula.
To receive it, you must be permanent residents for the entire previous calendar year, have the intention to reside in the state indefinitely, not be absent from Alaska for more than 180 days (with exceptions such as health problems, study, or the military), not be incarcerated or have major convictions or failure to comply with court orders. Minors require an application made and signed by their legal guardians.