Gov. Mike Dunleavy and his wife, Rose, welcome Juneau residents at the Governor’s Open House on Tuesday. (Michael Penn | Juneau Empire)

Gov. Mike Dunleavy and his wife, Rose, welcome Juneau residents at the Governor’s Open House on Tuesday. (Michael Penn | Juneau Empire)

Dunleavy budget draft includes full dividend, not back pay

  • By BECKY BOHRER Associated Press
  • Wednesday, December 19, 2018 10:42pm
  • NewsState News

JUNEAU — Gov. Mike Dunleavy’s initial budget draft includes a full payout from Alaska’s oil-wealth fund for residents next year, but not money Alaskans missed out on during the three years checks were capped.

His revenue commissioner, however, indicated that Dunleavy still plans to pursue the back payments.

The budget draft released last Friday — ahead of a statutory deadline — was described as a starting point that works off the budget document Gov. Bill Walker’s administration pulled together before Walker left office Dec. 3.

But Dunleavy’s draft relies on a more conservative oil price. And with the full dividend payout, Dunleavy’s budget office said the draft would leave a projected $1.6-billion gap. Walker didn’t include a full dividend.

During the campaign, Dunleavy said he supported paying residents a full Alaska Permanent Fund Dividend and money they missed out on when payouts were reduced starting in 2016 amid a budget deficit.

Revenue Commissioner Bruce Tangeman said separate legislation may be needed to handle the issue of back payments. He said Dunleavy has been clear that it is a big issue and one that he will pursue.

By one budget estimate, a full dividend and back payments could cost $4.3 billion. Dunleavy has said the state can afford to pay those using permanent fund earnings.

During the campaign, Republican Dunleavy also said he wanted to reduce spending and limit the growth of government.

His budget director, Donna Arduin, said all areas of state spending will be up for scrutiny.

“The state must learn to live within its means and we get there by making the tough spending choices,” she said in a release.

Dunleavy is expected to make further changes to the budget that his office says will prioritize services and programs “that really matter to Alaskans.”

Sen. Bill Wielechowski, an Anchorage Democrat, called the current proposed budget “significantly unbalanced.”

“I have no idea what his plan is to balance it,” Wielechowski said.

For years, Alaska relied heavily on oil revenues to help fund state government. But prices went into freefall in 2014, the year Walker took office, exacerbating the deficit. Lawmakers used savings to fill the hole as low prices persisted.

Earlier this year, following sessions of gridlock, lawmakers decided to begin using permanent fund earnings to help pay for the budget. That created tension, because dividends are also paid using fund earnings.

Legislators also passed a bill calling for limited withdrawals from earnings that, for the coming fiscal year, would yield $2.9 billion. However, critics of the bill have said the rules it lays out could be ignored.

That legislation did not resolve how the money would be divvied between government and dividends. Dunleavy’s draft budget would earmark an estimated $1.9 billion of that withdrawal for dividends.

The Walker administration said the budget they were leaving behind would balance at an average North Slope oil price of $75 a barrel, which matched the Department of Revenue’s preliminary estimate for prices for the coming fiscal year. But Sheldon Fisher, Walker’s revenue commissioner, also cited the volatility in prices and delayed issuing a detailed revenue forecast earlier this month to give the department time to review what was happening with oil markets.

Oil prices, for a brief period this fall, topped $80 a barrel. The price, as of Thursday, was roughly $62 a barrel.

Tangeman said he thought the $75 a barrel estimate was not realistic. The forecast released Friday estimated oil prices for the coming fiscal year at $64 a barrel. Tangeman said that is in line with a forecast released by the department earlier this year.


• By BECKY BOHRER, Associated Press


More in News

Clem Tillion of Halibut Cove poses for a photo on Jan. 9, 2020, in Homer, Alaska. The veteran Alaska legislator was passing through Homer while waiting to take the M/V Tustumena ferry to Kodiak. (Photo by Michael Armstrong/Homer News)
Clem Tillion, PFD founder and former legislator, dies at 96

Tillion died Wedneday, Oct. 13, at Halibut Cove home.

Donna Aderhold recites the Homer City Council oath of office and is sworn in for duty at the city council meeting on Oct. 11. (Photo by Sarah Knapp/Homer News)
New council members sworn into duty Monday

Newly-elected Homer City Council members Shelly Erickson and Jason Davis and re-elected… Continue reading

The Homer City Council met with new council members for the first time Oct. 11. The election results were certified during the meeting and council members Shelly Erickson, Donna Aderhold and Jason Davis were sworn in. (Photo by Sarah Knapp/Homer News)
City of Homer 2020 audit shows clean financial records

The City of Homer received a clean audit for the 2020 fiscal… Continue reading

The Homer Election Canvass Board counted the final Homer City Council election ballots Friday, Oct. 8. (Photo by Sarah Knapp/Homer News)
Election results certified in municipal elections

Aderhold, Erickson, Davis win Homer City Council; Tupper wins Kenai Peninsula Borough Assembly, District 9; Daugharty wins Kenai Peninsula Borough Board of Education, District 8.

Commercial fishing and other boats are moored in the Homer Harbor in this file photo. (Photo by Michael Armstrong/Homer News)
Seawatch: Crabbers look at cuts to quotas

Tanner, opilio crab quotas cut on top of cancellation of fall king crab fishery.

Several members of the Alaksa House of Representatives were absent form a floor session Tuesday, Oct. 12, 2021, but after a quiet first week lawmakers are scheduled to hold committee meetings through the end of the week. (Peter Segall / Juneau Empire)
COVID cases delay Senate

Still slow going.

Most Read