Alaska governor’s budget plan includes roughly $3,400 checks for residents and deficit of nearly $1B

JUNEAU, Alaska– Alaska Republican Gov. Mike Dunleavy on Thursday unveiled a budget plan that would pay residents an oil wealth dividend of about $3,400 next year using a formula lawmakers have all but abandoned and would use the savings to plug an estimated deficit of 990 million dollars.

The proposal does not include an increase in the per-student K-12 school funding formula, although Dunleavy, a former educator, said he expected education to be at the center of discussions when lawmakers convene for their new legislative session. next month. He said he wanted lawmakers to consider his proposal from last session that would provide bonuses to teachers as a way to help recruit and retain them.

Dunleavy criticized the federal government and groups that have challenged oil, mining and other development projects in Alaska, saying they have left the state with options such as having to make budget cuts, taxing residents and businesses, or downsizing. of the annual dividend. Alaska has no state sales or personal income taxes, and for years, without a resolution, lawmakers have talked about the need for a tax plan that moves away from the boom-and-bust budget cycles tied to dependence on the state. of a volatile product: oil. .

A central element of a tax plan is what the annual dividend should be. For years, until 2015, the dividend was paid according to a formula that many lawmakers have since come to view as unsustainable and unaffordable. In 2016, amid deficits, then-Gov. Bill Walker vetoed about half the amount available for dividends, and the state Supreme Court later decided that the dividend program must compete for annual funding like any other state program.

Since then, the amount has been set based on what can get enough votes to pass a budget, and the debate over the size of the check often overshadows other issues.

This year’s dividend was $1,312 and cost about $880 million, with potential for a bonus check of up to $500 next year if oil prices beat forecasts. Dunleavy on Thursday proposed a dividend for next year in line with the formula last used in 2015, at a cost of about $2.3 billion for checks to residents of about $3,400 each, his budget office estimated. .

The price of inflation is “affecting everyone’s pockets. So we hope we can keep the FPD as high as possible to help Alaskans buy groceries, fuel, etc.,” Dunleavy said at a news conference, referring to the Permanent Fund Dividend.

The budget proposal is a starting point. The House and Senate will each have the opportunity to craft their own versions of the budget, which are typically reconciled through negotiations near the end of a legislative session. The 40-member House has a Republican-led majority. The 20-member Senate is controlled by a bipartisan majority.

Senate Finance Committee Co-Chairman Bert Stedman, a Republican from Sitka, said in a statement that the focus “will remain on a balanced budget without having to dip into our significantly low reserves. “Our job is to allocate resources wisely while addressing the needs of our communities.”

Administration officials on Thursday outlined other items in the budget plan for the fiscal year that begins July 1 and as supplemental items for the current year, including funding for additional staff to process a delay in voucher benefits for food.

As part of the current year’s budget, the Legislature approved a one-time funding increase of $175 million for schools in response to requests from local officials seeking a more permanent funding increase. School officials have said inflation and fixed costs like heating were taking a toll on their budgets, in some cases forcing cuts to programs or requiring larger class sizes. But Dunleavy vetoed half of that additional funding.

On Thursday, some education leaders said they were disappointed that Dunleavy did not include an increase in the school funding formula in his proposal.

Jharrett Bryantt, superintendent of the Anchorage School District, said Alaska districts “are struggling to attract and retain teachers and classroom support positions due to salaries and benefits that cannot compete with those offered in the lower 48 states.” . This directly results in lower student outcomes and larger class sizes.”

He said his district has “hundreds of open positions that it is struggling to fill because of how future educators view the current conditions of the profession in Alaska.”