Gov. Walker's veto cuts Alaska Permanent Fund dividends to $1,022

Gov. Bill Walker announced on Friday the amount of the next Permanent Fund dividend: $1,022 for every qualified Alaskan, in spite of the state's multibillion-dollar budget deficit.

But the oil-wealth payments are less than half of what they would have been had Walker not vetoed a portion of the Alaska Legislature's transfer of money to pay them. That partial veto in June reduced dividends from an estimated $2,052. The larger dividend would have been paid from a $1.3 billion pot originally set aside by the Legislature.

The money available for dividends, determined by a formula tied to investment returns from the Permanent Fund, has remained high even as oil revenue that pays for most of Alaska's government services has dried up.

Walker's veto, he reiterated in a Friday morning video message, was to preserve the state's dwindling savings accounts.

For the past year, Walker has been promoting a deficit-reduction plan that would divert some of the $54 billion Permanent Fund's investment earnings to help pay for government services. A House committee rejected an amended version of his proposal after the Senate approved it earlier this year.

"If we don't fix the dividend, certainly everything indicates it will go away in the next couple of years," Walker said in the video.

The governor's authority to veto a portion of the dividend is the subject of an ongoing lawsuit filed by a Democratic state senator, Bill Wielechowski, and two former Republican lawmakers, Clem Tillion and Rick Halford.

Walker was in South Korea on Friday, meeting with government and business officials in hopes of selling some of the state's natural gas for its proposed pipeline project. His office filmed the video last week, after his administration calculated the dividend amount, said spokeswoman Katie Marquette.

More than 643,000 Alaskans will receive this year's checks, Walker's office said.

Walker handed over the official task of announcing the size of this year's PFD to a junior high school student, Shania Sommer, who in the video reprised a role she played a year ago.

In 2015, Sommer unveiled a $2,072 dividend in a conference room in the state-owned Atwood Building in downtown Anchorage.

This year, the video announcement was filmed by Walker's staff at Sommer's school in Palmer — a venue that, in a brief question-and-answer with Sommer, Walker used to stress his view of the urgency of a long-term budget plan for the state.

He pointed out that this year's dividend — even at its reduced level — was still roughly in line with the state's historical average of about $1,150.

The House's Republican-led majority was quick to denounce the governor Friday, issuing a statement saying Walker's "unilateral decision" would take "money from Alaskans' pockets." But the statement offered no suggestions of other ways to reduce the budget deficit.

Anchorage Republican Rep. Charisse Millett, the majority leader, earlier this year sponsored her own legislation that was similar to Walker's proposal to restructure the Permanent Fund.

"We cannot close the gap with cuts or new broad-based revenue alone. A sound fiscal solution will necessarily involve using the Permanent Fund," said a slideshow on the legislation by Anchorage Republican Sen. Lesil McGuire, who presented it alongside Millett in the House Finance Committee in February.

But on Friday, Millett criticized Walker. In a prepared statement, she said, "We heard from our constituents during session and we're still hearing from them now: 'Don't take the PFD to pay for government.'"

In a phone interview, Millett argued that her position wasn't inconsistent with her legislation, which would have only delayed a restructuring of the dividend until after this year, not avoided a restructuring altogether.

"My constituents would have understood how it worked. They would have understood the process and had some time to recognize that the structure of the dividend was going to change," she said. "The governor didn't get his way — he can't just arbitrarily make it so."

The divide in public opinion seemed to be encapsulated by a pair of tweets sent in response to a question from Rep. Shelley Hughes, R-Palmer, about what people thought about the dividend announcement.

One reply, from "Carlisleboy," read, "It's theft from every person in Alaska because you idiots cannot balance a budget like all of us have to do!"

But another, from Dan LaSota, said, "I'm glad our governor stepped in to fill the leadership vacuum created by the Legislature."