What started out as a $3,300 Permanent Fund dividend for 2024, as proposed by Gov. Mike Dunleavy, has now been whittled to $1,600 by the Alaska Senate Finance Committee.
The committee has cut the proposed dividend by over 40% from the House of Representatives’ proposed version. The cut is also more than half of what Dunleavy set forth in his budget; the governor believes in following the formula that is written in Alaska law.
But the amount is not set in stone yet. The House of Representatives had settled on a $2,723 dividend, the Senate budget writers rolled out the $1,600 proposed dividend last week, and the final amount will be negotiated in “conference committee” at the end of the legislative session.
Dividends are sent out to qualifying Alaska residents each year as their share of the oil royalties, since subsurface rights in Alaska belong to the people. The amount is set by a formula in Alaska Statute, which has not been followed since Gov. Bill Walker broke the law in 2016 and cut the amount of Alaskans’ dividends in half. In 2019, the newly elected Gov. Dunleavy tried to restore the statutory formula but he is not allowed by law to add back money to the dividend, once the Legislature cuts it, which has happened every year since 2017.
The total operating budget for agency operations is set at $4.6 billion in state dollars in the Senate version. Adding in the federal dollars, the Senate budget is proposed to be nearly $12.8 billion. With the capital budget at $255.9 million in state spending and the Mental Health budget at $15.1 million, there is a $196.8 million surplus.
But that surplus may be eaten away by the more than $203 million in potential fiscal notes on things like House Bill 193 (Broadband), which has a cost of $39.4 million, and Senate Bill 170 (Senior Benefits) with a fiscal note of $23.5, as well as other fiscal additions; four unions are still negotiating salary adjustments, which could lead to 5% raises, totaling at least $26 million.
Gov. Dunleavy’s proposed budget, submitted to the Legislature in December, totaled $14.1 billion in state and federal funds, with a budget deficit of $987 million to be covered by a draw from the Constitutional Budget Reserve and the Statutory Budget Reserve.
The current Senate working version of the budget funds nearly 21,000 full-time state workers and one 2,300 permanent part time and temporary workers.
The Senate operating budget has, similar to the House version, a $175 million one-year extra funding for education, outside of the current Base Student Allocation funding formula.
The governor lost some items in the process. Legislators took out the Public Safety airplane the governor asked for and some of the public safety positions the governor wanted, for example.
The Legislature has 17 days left to finalize the budget, with the last day of session set at May 15.
