Legislature gives final approval to $2.1 billion payout to Alaskans in dividends, energy relief

The Alaska Legislature gave final approval to its budget in the closing minutes of the legislative session Wednesday, approving a payout to Alaskans of more than $2.1 billion in dividends and to offset energy prices pumped up by the war in Ukraine.

The House approved the budget about an hour-and-a-half before the session adjourned for the year, signing off on checks that will total about $3,200 per person.

Adjusted for inflation, this is the second largest annual payout in the four decades the state has been sending checks to residents. It includes half of the 5 percent draw from the Permanent Fund, plus $650 per person to deal with higher energy costs.

The checks will be almost three times bigger than those distributed last year.

A proposal in the budget that would have increased the total payments by more than $420 million, adding another $650 per check, failed in the House by a single vote.

It required a three-quarter vote for approval, but only received 29 “yes” votes, one vote short. The proposal was blocked by 11 Democrats and independents.

The $420 million would have been withdrawn from the Constitutional Budget Reserve. But that money will remain in state savings.

To put this in context, $420 million is about what the state spends in unrestricted general funds on the University of Alaska, and the transportation and natural resources departments combined.

Shortly after the vote, Fairbanks Rep. Grier Hopkins, one of the 11 House members who voted against the extra payout and for the $3,200 total told the Anchorage Daily News: “It was a hard vote. I think the dividend amount plus the $650 will help Alaskans and I think that’s important. I don’t think any elected officials should make their votes based on reelection. I think they should make it based on what’s right for their state and all of Alaskans.”

In the Senate, Sen. Lyman Hoffman said he voted against the additional funds because he wants to save some for next year.

“I wanted to save that money for next year so that we can start to level out and try to make it possible to spend a dividend on a 50-50 basis next year,” Hoffman said. “It’s either feast or famine, and we need to stabilize the dividend.”

I think it was the right decision. It was also a surprise. The election-year pressure was to pump up the direct payments now without regard for next year or the year after that. The House took a small step in the right direction by holding the payout to $2 billion.

It is always easier to spend money than to save it. The budget is based on oil prices remaining high, but no one can say for certain what will happen over the next year.

The final payout is roughly $1.5 billion below the payout totals approved by the Senate last week for dividends and energy relief and rejected by the House.

The effective date on the budget was approved, so there won’t be any nonsense about a July government shutdown as there was last year.

The Alaska Beacon has detailed coverage of the final night, as does the Anchorage Daily News.

The Beacon reported that “the $3,200 payment — the exact amount will depend on the number of PFD recipients this year — will be the second-largest in state history when adjusted for inflation.”

When Republicans in the Senate learned that the House had declined to take $420 million from savings for higher payouts, they blocked a campaign finance bill that would have put limits this year on how much people can contribute to political campaigns, the Beacon reported.

“Sen. Jesse Kiehl, D-Juneau, said it was a pressure tactic intended to force them to change their votes. Senate President Peter Micciche, R-Soldotna, said the failed reserve vote discouraged senators from pursuing the bill,” the Beacon said.

“The campaign finance bill died when the session ended, which means candidates in this year’s election may accept unlimited amounts of campaign contributions.”

At 10:56 p.m., the House rejected taking $420 million from savings.

At 11:19 p.m., the Senate voted 11-8 to refuse to bring up the amended campaign bill, thus giving its blessing to unlimited campaign contributions in every state political race this year.

The Senate sat on this bill for a year. The legislative session ended at 12:03 a.m.

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