The Senate Finance Committee, seen here with chair Sen. Bert Stedman, R-Sitka, leading a meeting on Jan. 27, discussed Monday Gov. Mike Dunleavy’s propsoal for a $1.4 billion supplemental budget. Most of that money would go to paying out a supplemental Permanent Fund Dividend. (Peter Segall / Juneau Empire)

The Senate Finance Committee, seen here with chair Sen. Bert Stedman, R-Sitka, leading a meeting on Jan. 27, discussed Monday Gov. Mike Dunleavy’s propsoal for a $1.4 billion supplemental budget. Most of that money would go to paying out a supplemental Permanent Fund Dividend. (Peter Segall / Juneau Empire)

Supplemental budget proposal asks for $1.4 billion

Payment would need second Earnings Reserve draw

Gov. Mike Dunleavy’s supplemental budget proposal totals nearly $1.4 billion — about $1.2 billion of which would go toward additional Alaska Permanent Fund dividend payments.

At a Senate Finance Committee meeting Monday morning, committee chair Sen. Bert Stedman, R-Sitka, called the proposal “a doozy” and asked OMB Director Neil Steininger if it was the largest in the history of the state or the territory. Steininger said he would have to check but noted the majority of the budget went to PFD payments.

“The inclusion of the completion of last year’s dividend is the significant item here,” Steininger said at the meeting.

[Dunleavy proposes budget for ‘unprecedented’ times]

ADVERTISEMENT
0 seconds of 0 secondsVolume 0%
Press shift question mark to access a list of keyboard shortcuts
00:00
00:00
00:00
 

Supplemental budgets typically cover the costs incurred by the state while the Legislature is out of session and paid for out of money set aside by lawmakers. In past years, supplemental budgets have helped cover costs related to wildfire or earthquake damage.

Last year’s supplemental budget was $265 million. But the coronavirus pandemic shocked the economy and forced the Legislature to convene early last year even as the state set up its emergency response to the virus. Addressing the public during the meeting, Stedman said lawmakers had considerable work before them in sorting out the various expenditures.

“These are large supplemental numbers, but there are a lot of anomalies in here,” Stedman said. “We’re going to silo them into the proper fiscal year, and then try to factor out what are the anomalies and other issues so we can put a finer point on the structural deficit.”

The governor’s supplemental budget is spread out across four different pieces of legislation breaking down the requests into three key areas. Senate Bill 48 includes high-priority projects and completion of the Fiscal Year 2021 capital budget, according to OMB. Senate bills 49 and 50 include technical supplemental items primarily related to changes in the FY22 budget and Senate Bill 68 is the normal request for emergent needs, according to Steininger’s presentation.

[Lawmakers cautious of governor’s budget]

Steininger said several departments had fallen short on revenue due to various complications from the pandemic such as not being able to offer in-person services. The Department of Education and Early Development saw a drop in enrollment when schools went to online learning, he said, and certain scheduled fee increases were suspended.

The governor is proposing an additional PFD of roughly $1,900 per person, Steininger said. In order to do that the state would have to make a second draw from the Earnings Reserve Account of the Permanent Fund. By law, the state is only allowed to use 5% of the annual earnings on the ERA. The governor is proposing a second draw for the 2021 fiscal year, something he’s defended as necessary to stimulate the state’s economy but lawmakers on both sides of the aisle have been wary of the plan.

“We’ll obviously have some discussion in much more detail,” Stedman said. “Clearly, there’s some concern from the Permanent Fund on the impact on the earnings reserve.”

Contact reporter Peter Segall at psegall@juneauempire.com. Follow him on Twitter at @SegallJnuEmpire.

More in News

President Zen Kelly speaks during a meeting of the Kenai Peninsula Borough School District Board of Education in Soldotna, Alaska, on Monday, July 7, 2025. (Jake Dye/Peninsula Clarion)
School board finalizes budget with deep cuts to programming, classrooms

Multiple members of the board said they were frustrated by the state’s failure to fund education.

Former KPBSD Finance Director Liz Hayes speaks during a Kenai Peninsula Borough School District budget development meeting at Kenai Central High School in Kenai, Alaska, on Wednesday, Feb. 19, 2025. (Jake Dye/Peninsula Clarion)
School district finance department earns national awards

The two awards are based on comprehensive reviews of the district’s budget and financial reporting.

Children leap forward to grab candy during a Fourth of July parade on South Willow Street in Kenai, Alaska, on July 4, 2025. (Photo courtesy Sarah Every)
Celebrating the 4th in the streets

Kenai comes out for annual Independence Day parade.

Fire crews respond to the Bruce Fire, July 4, 2025, in Soldotna, Alaska. (Alaska Division of Forestry)
Firefighting crews respond to wildfire outside Soldotna

The 8-acre fire and two “spot fires” of less than one acre each are located near Mile 102 and 103 of the Sterling Highway.

Robert Weaver was last seen at the Doroshin Bay public use cabin on June 25, 2025. (Photo provided by the Kenai National Wildlife Refuge)
Updated: Refuge ends search efforts for missing man

Robert Weaver was last seen near Skilak Lake on June 25.

The Alaska Dive Search Rescue and Recovery Team conducts a training mission in Seward, Alaska in 2024. Photo courtesy of the Alaska Dive Search Rescue and Recovery Team
Anchor Point fundraiser to benefit Alaska rescue and recovery group

Alaska Dive Search Rescue and Recovery Team is an all-volunteer nonprofit organization established in 2016.

Kachemak Bay Family Planning Clinic staff (left to right) Angie Holland, RN; Jane Rohr, Sonja Martin Young, CNM; Robin Holmes, MD; and Cherie Bole, CMA provide an array of reproductive and sexual health services. (Photo provided by KBFPC)
Kachemak Bay Family Planning Clinic releases report on STI trends on the Kenai Peninsula

The report pulls from data gathered from 2024 to early 2025.

Pool manager and swim coach Will Hubler leads a treading water exercise at Kenai Central High School in Kenai, Alaska, on Tuesday, June 17, 2025. (Jake Dye/Peninsula Clarion)
Swimmers, parents call on Kenai to support Kenai Central pool

The KPBSD Board of Education last week said communities will need to step up and take over administration of pools within the next year.

Most Read