PHOENIX - Next month Alaska will pay out some $657 million as an annual dividend to its citizens, a drastically reduced amount that Gov. Bill Walker is hoping will hammer home the need for significant fiscal reform in the state.
Walker announced Friday that starting Oct. 6th, over 643,000 eligible Alaskans will receive a $1,022 check for their annual Permanent Fund Dividend payment. Money for the fund comes from a share of taxes and fees paid by oil companies operating in Alaska. The oil revenue has slowed to a drip due to the extremely low price of crude, and Walker vetoed half of this year's expected the dividend fund payout.
Last year, Alaskans received $2,052 each, for a total bill of $1.3 billion.
Walker warned that path is no longer sustainable without changes. The legislature this year failed to embrace Walker's reform package that would have levied new taxes to get Alaska's books balanced.
"Over the past two years, Alaska has lost over 80% of our income, resulting in an over $4 billion budget deficit," said Walker. "While my administration presented a complete fiscal plan to the legislature last session, legislators did not pass a single component of that plan. We cannot continue on our current path without making significant changes. If we do, the dividend program will be gone in just a few short years."
A release from the governor's office noted that the state last year spent more on dividend payouts than on education. Rating agency analysts have said that Alaska will likely be downgraded if it does not begin to enact meaningful financial reforms soon.
"We have been drawing down on our savings at a rate of $12 million a day," Walker said. "If we do not fix Alaska's budget soon, we will have burned through the money available for future dividend checks. Since the program's inception, the average PFD has been about $1,100. This was an extremely difficult decision and one that I did not make lightly. It was a necessary one, however, as the veto ensures the money will remain in the fund so checks will be available to future generations of Alaskans."
