Senate Finance chops dividend to $1,600; otherwise budget reflects House proposal for next fiscal year

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Sen. Bert Stedman, co-chair of Senate Finance Committee.

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.

41 COMMENTS

  1. It’s funny how the Permanent fund payout can get cut but all the other Alaska operations get increases. If you cut the payout, the other departments can easily absorb 1-4% cuts, (Only the Gasline agency I see got cut). Fat keeps getting larger until someone makes these departments lean.

    • Crooked, corrupt, incompetent thieves.
      It’s, “We the People’s” money – not these mediocre robbers pretending they serve you he people.
      In light of the extreme inflationary pressures Alaskan families are facing – people really need these extra monies.
      Immoral.
      When the 2nd Amendment is finally exercised – it won’t just be the Feds that feel the people’s wrath.
      Sic Semper Tyrannis!

      • Doing the same thing over and over expecting different results is the essence of insanity.
        Be honest about who is ultimately to blame. The voters want this, or we would have swept them out of office years ago.

        We know, know this is gonna happen, but we keep sending them back anyway. This is the government we want, and deserve. It will continue this way until one of two things happen.

        1-the legislature bankrupts the PF, corpus and all.
        2-Alaskan voters actually bother to vote these idiots out and replace them with competent, non union functionaries.

        Smart money says the PF is dead inside of 20 years.

  2. Imagine.

    The rulers of Alaska care little about silly things like laws, statutes, legal obligations.

    That’s for us, not them.

  3. It would be much more honest if the legislature came out and said, in so many words, you peasants don’t deserve the money we own you.

    Do we’re gonna keep it and spend it on things that will make unions happy and keep us in power.

  4. Every year, the governor pushes for the full PFD. Then the House cuts it. Then the Senate cuts it even more.

    Every year, the Alaska Legislature breaks the law.

    My mom’s senior benefits per year don’t add up to the full PFD. She’d rather get the full PFD. I’ll be a senior soon enough. I’d also rather get the full PFD.

    If I ever find some resource worthwhile on my land, don’t think I’ll be sharing ALL of it w/the rest of the State.

    • When I finally retire, I’m headed south. I don’t want to, but staying in blue Alaska on a fixed income isn’t realistic.

  5. 4.7 billion is better than 7 billion that I remember hearing it was in 2014. I think the Statebudget should be cut down to 1 billion to date for a state with a population at approx 745 thousand.

  6. When the state’s budget is 1 billion the. I be complaining it be cut down to 800 million until it reaches 500 million. I think a 500 million budget for our state’s population size is right size government spending we’d reached perfection.

  7. If you feel the unions and bureaucrats can spend your money better than you can spend it yourself you can always donate it.

  8. Hey, I’ve having trouble paying all my bills, so why can’t I just go ahead and steal from my neighbor to meet my full monthly expenses? I mean, that is essentially what the Alaska legislature has been doing for the past eight years.

    • Just to up and down the west coast looting stores. Just keep it under $1000 per stop and you’re golden.
      It’s the system they set in place, use it.

      Regarding rent/mortgage, just don’t pay it at all. Why should you be the only one doing so?

    • Jefferson, exactly the point. The P-Fund’s original intent was to limit the size of Government by taking a portion of the Oil $ and reserving for the PEOPLE. It was a genius concept devised by Oral Freeman a representative from Ketchikan. Oral would be rolling over in his grave if he could see that the very same wicked Political Operatives that his bill was to restrict from spending the “peoples” $ were now stealing that $ and forking it over to their Pal’s.

      One could be tempted to blame Evil Burt and his clan of Highwaymen for this heist but that wouldn’t be the full picture, blame your fellow Alaskan who votes for this group of bandits!

  9. The price of oil per barrel has nothing to do with calculating the permanent fund dividend despite certain legislators repeating that mantra, it just gives the legislature an easy out to cut your full PFD and give you a token “energy rebate”. The PFD should be and is based on the prior 5 year rolling average of the earnings of the permanent fund split 50/50 between us and them with other details in statute that hasn’t been followed since 2016 raid on your PFD.

    There is a lot of vacancy factor in each department to absorb cuts from unfilled positions but ghost funded FTEs in their annual budget. I used to work for one of those alphabet soup state agencies. So a cut of 2% state funds across the board for each and every department is not going to break them to boost your PFD. The special interests and unions won’t stand for it and you’ll never see this happen.

  10. I don’t follow the PFD steal much, be it politics or economics. I just simply don’t understand how they decide Alaskans can only get so much.

  11. They can use that money they steal from us to book flights on Mary P’s Bush Express for their moose hunts this fall.

  12. Let’s break this down:

    Under current state law (since 1986), Alaskans will receive ~$3,460 in the form of a 2024 PFD check.

    Uncle Joe takes his cut, through inflation first. $3,460 in 2024 isn’t worth what it was even as far back as 2023.

    After Uncle Joe, the state house takes a whack at it, chopping off 30%.

    You’re left with $2,430 in 2024 inflated dollars.

    After that, the senate proposes whacking that by more than a third (34%) down to $1,600 in 2024 inflated dollars.

    If the house follows the senate’s lead, you’ll be left with that $1,600 “mega-dividend” in 2024 inflated dollars, and that’s before Uncle Joe takes his second swipe at it through his friends at the IRS.

    Inflation-adjusted median household income has been dropping, but not so much that most Alaskans won’t still see a marginal tax rate of around 22%.

    So, on average, Uncle Joe will take about $352 of what’s left of your PFD, leaving you with $1,248 of your 2024 PFD.

    Now a legislator in Juneau is going to pipe up at that point (they do every year) and remind you that the first dividend was only $1,000, so you’re actually doing better this year than when the law was first passed.

    Actually, no.

    $1,000 in 1982 is worth many times that in 2024 dollars. The value hasn’t changed. It just takes more dollars now to buy the same stuff.

    Remember, the state only places 25% of mineral royalties in the Permanent Fund. It spent 75% off the top. The only thing going into the Permanent Fund is what’s left after they’ve spent as much of it as the constitution allows.

    What the senate is saying is that, after it spends the first 75%, it is now going to spend most (54%) of your portion of the earnings too. The Legislature has already spent most of your dividends for the last eight years. This just makes number nine.

    If they have their way this year, they will have spent $14,592 of your current and past dividends on state spending for various very important things (like $4M this year for a new “drug-free” homeless shelter in Anchorage, and $10M this year on subsidies for seafood and tourism advertising).

  13. These Left-wing senators have been jerking Alaskans for years now. Can’t wait til they come back home to their districts. I hope they like their omlettes soupy with lots of tomatoes. Cuz that’s what they’re gonna get.

  14. With inflation running rampant, interest rates a going through the roof, and a record number of Alaskans living off their credit cards to make ends meet, what the Senate just did to their constituents is criminal. If ever the time was right for a full PFD, it is NOW!!

    • Exactly wrong again, Paola. But not surprising, coming from you, as you radical leftist extremists implicitly believe that EVERYTHING belongs to government in the first place. How delightfully regressive and statist of you.

  15. People need to wake up the whole Senate finance committee has to be replaced. The problem has been around for years and people like Steadman, Hoffman, Olson, Bishop, Wilson, and Merrick just sits there and doesnt do anything just watch them on Senate Finance they dont listen to the people thats is why the State Govt. and the legislature is so messed up because they dont listen to the people and do want they want. Thats why in my opinion the next Legislature session the senate finance has to all be changed out in including Jesse Kiel from Juneau he has drinken the coolaid in Juneau as all of the rest of the Finance Committee.

  16. Corrupt swines in office, they don’t represent, if they gave a crap they would have reinstated what Gov Walker undid years ago.

  17. Didn’t take them any time at all last year when the clowns in Juneau gave themselves the giant raise. And we have no one to blame but ourselves. It does no good to complain about what they do to us because we are the voters that sent them there. Hoping the Governor uses his Red Pen. Nothing to stop you this year Big Guy, go out by making sure you did what you could to help the people.

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