ANCHORAGE (KTUU) - More than 643,000 eligible Alaskans will receive PFD checks this year worth $1,022, according to an announcement made by Governor Bill Walker on Friday morning.
Gov. Walker made the announcement in a video with Palmer 8th grade student Shannia Sommer, the same student who revealed last year’s dividend amount. The video was recorded at Valley Pathways High School in Palmer about a week before it was released on Friday, the governor's office said.
This year’s PFD payout will be less than half of last year’s historically high $2,072 dividend, after Walker announced in June a controversial veto to use Permanent Fund earnings to help preserve the state’s rapidly declining savings.
According to a statement issued by the governor’s office, this year’s PFD checks would have been as high as $2,052 had the veto not been issued. The Permanent Fund’s total this year was about $1.3 billion, the governor said.
The governor's veto of the dividend will keep roughly $650 million in the earnings reserve. Economist Gunnar Knapp, says that money, if invested, could generate $30 to $40 million each year in investment earnings.
Although that money can be allocated by the legislature as early as next session to help fund government, there's no guarantee the money will be used to reduce the fiscal gap.
"The money that's vetoed out of the dividend goes right back into the earnings reserve," said Rep. Dan Saddler (R-Eagle River). "And yes, there will be earnings from that, but again it does nothing to fill the actual fiscal gap that the governor is using as a pretext for cutting the dividend."
In Friday's video, Walker said the unpopular decision was necessary to help preserve future PFDs in a time where the state is grappling with a more than $4 billion budget deficit.
“We have been drawing down on our savings at a rate of $12 million a day. If we do not fix Alaska’s budget soon, we will have burned through the money available for future dividend checks,” Walker said. “The veto ensures the money will remain in the fund so checks will be available to future generations of Alaskans.
Gov. Walker’s veto has been widely criticized and Alaska Senator Bill Wielechowski, D-Anchorage recently filed a lawsuit challenging the decision.