Alaska Legislature set to approve a $1,650 combined PFD and energy relief payment

JUNEAU — The Alaska Legislature is set to approve a combined Permanent Fund dividend and energy relief check of roughly $1,650 for eligible Alaskans this year.

Fights over the size of the annual dividend have paralyzed the Legislature in recent years. The dividend and budget debates have been much less contentious this year, with legislators instead grappling with major policy items related to energy, education and criminal justice reform.

The $1,650 dividend was agreed to on Tuesday by members of House and Senate leadership who sit on the operating budget conference committee. That committee is tasked with reconciling differences between the House and Senate budgets so a single budget bill can pass through both chambers and onto the governor’s desk.

Gov. Mike Dunleavy in December proposed a $3,500 dividend following the 1982 statutory formula that was projected to create a $1 billion deficit. The House approved a check in April close to $2,300, which was expected to leave the state roughly $270 million in deficit.

Legislators were broadly opposed to using state savings to pay for a dividend.

On the penultimate day of the regular legislative session, members of House and Senate leadership settled on a dividend close to the Senate’s approved figure of $1,580.

The Senate had followed the 75-25 formula, where three-quarters of an annual draw from the Permanent Fund goes to state services and one quarter goes to the dividend. Following that formula, the PFD would be roughly $1,360 per person.

Using additional oil revenue, the conference committee agreed to a roughly $295 energy relief check on top of the Senate’s PFD for a combined check of around $1,650. The check is typically paid to Alaskans in October.

Legislators agreed to clearly delineate which part of the check is related to “energy relief” because that portion would likely not be subject to federal taxes.

The conference committee concluded its work on Tuesday morning, allowing the budget to advance to a final vote on the House and Senate floors before the legislative session ends on Wednesday.

Sitka Republican Sen. Bert Stedman, who manages the operating budget in the Senate, said the state was expected to be roughly $100 million in surplus for the fiscal year that ends June 30. If those funds are not spent before then, they would be deposited into the state’s main $2.7 billion savings account.

For the fiscal year that starts in July, Stedman said the budget is expected to be balanced based on anticipated revenue.

If oil revenue substantially exceeds projections made in March, next year’s dividend could be boosted with another energy relief check, along with a larger deposit into savings.

The committee on Tuesday also agreed to deposit $1 billion in the non-spendable part of the Permanent Fund to inflation-proof the fund, which was half of the $2 billion transfer the Senate had wanted.

Palmer Republican Rep. DeLena Johnson, who manages the operating budget in the House, rejected the notion that her House Republican colleagues had agreed to a lower dividend. She said that the 2024 check would be substantially higher than the $1,312 check Alaskans received last year.

“There’s a lot of pieces to it,” Johnson said on Tuesday about the negotiations between the House and Senate to approve a balanced budget. “We have a solid capital budget. We have money going into savings.”

The $4 billion capital budget was approved by the Legislature on Friday. It funds infrastructure and capital projects across Alaska. This year, lawmakers decided to focus spending on school maintenance, renewable energy projects and housing.