Alaska Legislature finalizes $1,000 PFD; vote expected as soon as Tuesday
Members of the Alaska Legislature's budget conference committee are joined by Sen. Bill Wielechowski, D-Anchorage, as they discuss a budget amendment with aide Pete Ecklund, right, on Sunday, May 18, 2025. (Photo by James Brooks/Alaska Beacon)
This year's Permanent Fund dividend will be $1,000, according to a final draft state budget approved Sunday afternoon by six House and Senate negotiators.
The dividend was among the biggest items in a $5.9 billion document that will fund state services from July 1 this year through June 30 next year.
The draft approved Sunday is scheduled for a final vote as soon as Tuesday in the House and Senate and will advance after that to Gov. Mike Dunleavy, who may reduce or eliminate individual line items. He may not increase a line item.
The Legislature's regular session reaches its constitutional limit on Wednesday.
The latest forecast from the Alaska Department of Revenue expects significantly lower oil and gas revenue over the next year, and lawmakers significantly cut services and programs during the budget drafting process.
Unlike in previous years, the amount of the Permanent Fund dividend was not a contentious issue for budget negotiators at the end of the legislative session.
Rep. DeLena Johnson, R-Palmer, said on Sunday that lawmakers had already argued the issue earlier in the session, and even though she unsuccessfully voted for a $1,400 dividend on Sunday, she knew the $1,000 figure would be final.
'From my perspective, I already knew what this number was going to be,' she said.
Compressing the dividend is the state's precarious budget situation.
In December, Dunleavy handed lawmakers a budget draft with a $2.1 billion deficit and a $3,900 dividend; the budget will leave the Capitol with a surplus of about $55 million. Legislators expect that surplus will evaporate in the coming months — oil prices are running below the Department of Revenue forecast, and Republican members of Congress are planning to reduce the amount the federal government pays for major programs, including food stamps and disaster relief.
The Senate approved a budget draft with deeper cuts than the final document, but during the compromise process, lawmakers added individual line items preferred by the House, which proposed higher levels of spending and a draw from the Constitutional Budget Reserve, the state's main savings account, to pay for that spending.
The final version of the budget eliminates that draw from savings, except as needed to cover a deficit remaining in the current fiscal year.
If lawmakers don't approve the CBR draw, money would be taken from the state investment bank — better known as the Alaska Industrial Development and Export Authority, or AIDEA — and the state's education trust fund.
That will put pressure on members of the House's 19-person Republican minority caucus, who previously voted against drawing from the CBR. Thirty votes are needed in the 40-person House to spend from the CBR.
The final version of the budget includes an additional $13.7 million for child care programs, $5.7 million more for infant early learning programs and 15 new full-time positions to help process public assistance applications.
The conference committee, in charge of negotiating the compromise budget, also approved a House proposal to increase funding for behavioral health services used by mentally ill homeless people by $13.75 million.
'The Alaska Behavioral Health Association made a strong case that they need that,' said Rep. Andy Josephson, D-Anchorage and chair of the conference committee.
In future years, the state will try to obtain behavioral health funding through federal Medicaid grants.
A $1 million grant to food banks — proposed by the House — was rejected in the final version of the budget, as was funding for public radio.
There will be no new troopers for the Matanuska-Susitna Borough; the committee voted 4-2 to eliminate a section of the House budget that would have re-established the trooper post in Talkeetna. Sen. James Kaufman, R-Anchorage, and Johnson voted in favor of the addition.
Sen. Lyman Hoffman, D-Bethel and a vote against the addition, said that the reopened trooper post was suggested by Gov. Mike Dunleavy who withdrew that proposal — and all of his other proposed budget increases — before the conference committee met.
Johnson said the failure to include the troopers, who could be used to curtail the Railbelt drug trade, was 'probably one of the bigger disappointments for me in there.'
The final version of the budget also eliminates a paragraph that sought to restrict gender dysphoria treatment, the kind used by transgender Alaskans. That paragraph was inserted by the House in its budget draft, but the Senate didn't include it.
Conversely, a paragraph limiting abortion care, adopted by the Senate but rejected by the House, was included in the final budget draft.
That paragraph has been repeatedly challenged in court, and the effect of including it in the budget is a small cut to Medicaid funding.
Josephson said the result of the two decisions is a return to the status quo — the Legislature has included the anti-abortion language in its budget for years, and the anti-transgender language was new this year.
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