Alaska House hears budget with $2,500 in dividends, energy relief checks
JUNEAU, Alaska (KTUU) - The Alaska House Finance Committee is working on a budget bill that currently contains a Permanent Fund dividend check and an additional, one-time “energy relief check.”
Before those checks are paid out, the bill still needs to pass through the House of Representatives and then go through the Senate before heading onto Gov. Mike Dunleavy’s desk for his consideration
If adopted as written, the budget would pay a dividend this year worth roughly $1,250 and an energy relief check of $1,300. The dividend amount follows a 75-25 split of a now-annual draw from the Permanent Fund, where 75% goes to state services and 25% goes to the PFD.
Budget documents show that each check would cost the state around $850 million. The higher figure for the dividend would pay for administrative costs at the Permanent Fund Dividend Division.
When added together, the two checks proposed by the House would roughly equal the $2,500 dividend supported by Dunleavy, following his 50-50 PFD plan. House Minority Leader Cathy Tilton, R-Wasilla, suggested separating them out is “reindeer games” being played in an election year to deprive Dunleavy of a win.
“If you’re going to pay out a dividend, pay out a dividend,” she said. “And let’s just deal with the issue at hand.”
The idea behind the energy relief check is to help Alaskans struggling with the economic impacts of high oil prices and COVID-19. The Alaska Department of Revenue reported the Alaskan North Slope crude oil price at over $120 a barrel on Monday, the highest it’s been since May 2012.
”We felt that it was important that as we saw a windfall that we were also helping to provide a relief check to Alaskans, similar to what we saw in 2008,” said Rep. Neal Foster, D-Nome, on Monday.
In 2008, the Legislature paid a $1,200 energy rebate in addition to a dividend. The additional check was proposed and supported by then-Gov. Sarah Palin.
Tilton noted that Alaskans also received a statutory Permanent Fund dividend in 2008. This year, a statutory PFD is estimated to be over $4,200 at a cost to the state of almost $2.8 billion.
Some legislators are concerned about the precedent that would be set if a larger PFD is paid this year. Others want to see the long-term debates around the Permanent Fund dividend resolved.
Foster noted that the 2022 dividend figure could change through budget debates. He said it hasn’t been determined when the energy relief check will be paid out if it is approved.
The budget before the House Finance Committee has several changes from the one proposed by the governor last December. Its biggest new spending item would be in a one-time school funding formula increase of $50 million.
House Speaker Louise Stutes, R-Kodiak, has said increasing school funding is a priority for the bipartisan House majority coalition. But, she said there hasn’t been agreement yet if that should be in an increase through the school funding formula or for extra spending for early education.
There is $4 million added in the Alaska Department of Corrections budget for community and regional jails and $1.5 million extra for public radio.
The governor proposed funding most of the Alaska Marine Highway System’s budget through federal infrastructure dollars. The House is proposing to swap $59 million of that out for state dollars.
There are growing calls to use some of Alaska’s oil revenue windfall to refill the state’s depleted savings accounts. Foster said the current budget plan would save over $300 million, which could increase as oil revenue also rises.
The House Finance Committee will pause work on the operating budget until next week when the Alaska Department of Revenue is expected to release an updated revenue forecast. It’s expected to show hundreds of millions of dollars more in oil revenue for the upcoming fiscal year than was projected in December.
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