Governor limits PFD payouts to $1,000

ANCHORAGE — Facing a multibillion-dollar deficit, Alaska’s governor on Wednesday cut in half the annual checks that give all residents a share of the state’s oil wealth, but he kept enough money in place to award everyone a $1,000 payout.

Gov. Bill Walker’s administration said the checks had to be reduced in order to save the program.

The veto “preserves that ability to provide a check to every citizen in this state forever,” his budget director, Pat Pitney, said.

If nothing was done, Walker said the Alaska Permanent Fund — worth about $52 billion — would have been depleted in four years.

Jeffrey Ganotisi, 38, took some time off from painting a house on Wednesday to fish for king salmon in Ship Creek, which winds through downtown Anchorage. He had already heard the news that the governor is cutting the check in half, and he didn’t like it.

His wife is pregnant with their third child and is due in September. The dividend checks are cut in early October every year.

“We were going to use it for diapers and all that kind of stuff, but it’s going to be kind of tight,” he said.

Every year, they put some money away in their kids’ college fund and use some to stock up on food. It helped last year when nearly every single Alaskan received a record amount, $2,072 each or nearly $8,300 for a family of four.

“Now that they’re cutting it down, it’s going to hurt a little bit ‘cause I have a feeling they’re going to keep cutting it down,” Ganotisi said.

Alaska’s government relies mostly on revenue from oil production to stay solvent. But declining production and a precipitous drop in oil prices have left the state with a deficit of more than $3 billion for the next budget year.

If changes were not made, Walker has warned, the oil-wealth program could disappear. He introduced a bill earlier this year capping the checks at a $1,000 to help pay down the deficit. The state Senate passed the measure, but the House couldn’t get the bill out of committee before adjourning a special session last month.

Walker’s reduction of the oil-check purse was among $1.3 billion in budget vetoes that he said would result in savings across much of state government. He compared the cuts to running through fire.

“The fire is the future of Alaska,” the governor said.

After a news conference, Walker told The Associated Press that he runs the risk of having lawmakers override his budget vetoes because he’s called them back into session beginning July 11, but that’s not his intent.

“You know, I’ve pulled them back in special session so we can finish the job. If they take that time to override my vetoes, there’s nothing I can do about that,” he said. “I’ve done everything I can do.”

Walker said lawmakers complained to him that if the oil checks were reduced, they wouldn’t be re-elected this year in the fall elections. He said his veto alleviates them of that concern. Walker, a first-term independent, doesn’t face re-election this year.

Walker has proposed several measures to help bridge the gap, including tapping into the oil-wealth fund, which has paid a dividend yearly since 1982. He’s also proposed reinstituting the state income tax for the first time in decades.

Associated Press Writer Rachel D’Oro contributed to this report.

More in News

Drummers perform during a celebration of the 10th anniversary of the Dena’ina Wellness Center in Kenai, Alaska, on Friday, July 12, 2024. (Jake Dye/Peninsula Clarion)
Kenaitze tribe celebrates 10 years of ‘far-fetched dream’ at wellness center

Community members recognized the work done at the Dena’ina Wellness Center over the past decade

The Kenai Safeway is seen on Wednesday, July 20, 2022. (Camille Botello/Peninsula Clarion)
Kenai and Soldotna Safeways may be sold under proposed Kroger-Albertsons merger

The local stores will be sold to CS Wholesale Grocers only if the merger overcomes suit from the FTC

Sockeye salmon caught in a set gillnet are dragged up onto the beach at a test site for selective harvest setnet gear in Kenai, Alaska, on Tuesday, July 25, 2023. (Jake Dye/Peninsula Clarion)
Draft plan published for disbursement of $11.5 million in 2021 and 2022 ESSN disasters

Public comment will be accepted for the draft spend plan until July 24

The Kasilof River is seen from the Kasilof River Recreation Area, July 30, 2019, in Kasilof, Alaska. (Photo by Erin Thompson/Peninsula Clarion)
King salmon fishing closed on Kasilof starting Monday

The emergency order is being issued to protect returning king salmon, citing weak returns

Soldotna City Hall is seen on Wednesday, June 23, 2021, in Soldotna, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
Soldotna’s city council appropriates funds for FY 2025 capital projects

Improvements are described for streets, police facility, Soldotna Creek Park and Soldotna Community Memorial Park

Gina Plank processes sockeye salmon caught on the first day of Kenai River dipnetting with her table set up on the bank of the Kenai River in Kenai, Alaska, on Wednesday, July 10, 2024. (Jake Dye/Peninsula Clarion)
Kenai River open for dipnetting

As of Tuesday, a total of 226,000 sockeye had been counted in the Kenai River’s late run

Assembly Vice President Tyson Cox speaks during a meeting of the Kenai Peninsula Borough Assembly in Soldotna, Alaska, on Tuesday, June 18, 2024. (Jake Dye/Peninsula Clarion)
Assembly won’t pursue further discussion on tabled bed tax resolution

Members say they’re going to work on a new version of the idea this winter

Gov. Mike Dunleavy pictured with members of the House majority after signing the fiscal year 2025 budget bills, Thursday, June 27, 2024, in Anchorage, Alaska. From left to right: Reps. Stanley Wright, Tom McKay, Thomas Baker, Craig Johnson, Kevin McCabe, Julie Coulombe and Laddie Shaw. (Photo provided by Office of the Governor)
Dunleavy signs capital budget with $3.7M in state funding for Kenai Peninsula, vetoes $3.3M

Roughly $90 million in federal funding also allocated to Kenai Peninsula

Alaska State Troopers logo.
Soldotna man arrested Friday after 30-minute police chase

The man had an outstanding warrant for felony probation violation

Most Read