Alaska governor proposes cash payouts, infrastructure plan

December 12, 2020 GMT

JUNEAU, Alaska (AP) — Gov. Mike Dunleavy proposed an “extraordinary response” to revive Alaska’s pandemic-stunted economy Friday, including about $5,000 in direct payments to residents from the state’s oil-wealth fund and an infrastructure plan he said is intended to create jobs.

“Alaskans are suffering now. Businesses are suffering now. This is the time for us to act. This is the time for us to act quickly,” he said in rolling out his budget plan for next year.

The state’s economy has been battered by the COVID-19 pandemic, with tourism and hospitality industries among those hit hard. North Slope oil prices have been below $50 a barrel for much of the year.


Dunleavy’s proposal calls for taking $6.3 billion from the earnings of the nest-egg Alaska Permanent Fund this year and next, with roughly half that amount going to checks for residents and half toward government expenses.

The administration said residents who received permanent fund dividends this year would be eligible for checks of about $1,900 under the plan, payments Dunleavy said he would like to see fast-tracked. He also proposed dividends in line with a decades-old formula that hasn’t been followed in recent years, expected to be around $3,000, for later in 2021.

His plan would exceed a statutory withdrawal limit of about $3.1 billion for the fiscal year starting July 1, and Dunleavy said the amount he proposes taking from earnings should be viewed as an anomaly. Since 2018, lawmakers have sought to limit how much can be withdrawn from earnings for dividends and government expenses amid ongoing budget deficits, and there have been heated, unsettled debates about the future of the dividend program as part of that.

Dunleavy’s office said the governor, who has long supported a dividend in line with the formula last used in 2015, would propose a new formula going forward that calls for at least half of any withdrawals to go to dividends. He would seek an advisory vote on the plan, should it advance, from the public, his office said, and pursue a constitutional amendment dealing with the dividend.

Lawmakers Friday said they were digging into details of Dunleavy’s budget plan, including proposed cuts. Neither the House nor the Senate has organized ahead of the next legislative session, which begins in January.

The current House speaker, independent Bryce Edgmon from Dillingham, cited concerns about the proposed level of draws from permanent fund earnings and what he said was the lack of a plan “for how we will make ends meet beyond next year.”

He described as promising a proposed infrastructure project bond package, which Dunleavy said would help employ Alaskans.

Sen. Bill Wielechowski, an Anchorage Democrat, said he would like to see if the incoming Biden administration pushes an infrastructure plan at the federal level that would help Alaska.

Wielechowski also said he would like to see changes to Alaska’s oil-tax structure. A citizen-led initiative to change oil taxes failed last month.

Dunleavy said revenue discussions “need to take place within the Legislature itself,” and his office said he would again pursue a constitutional amendment requiring a vote of the people to institute new taxes.

The governor said his budget plan adheres to an agreement reached with University of Alaska system leaders in 2019 that called for $70 million in operating cuts over three years.

The system’s interim president, Pat Pitney, said requests for capital funding for things like deferred maintenance and COVID-19 relief weren’t included in Dunleavy’s proposal. She called such funding essential.