Dunleavy pitches budget that draws billions from Permanent Fund earnings next year

Gov. Mike Dunleavy debuted a budget proposal Friday for next year that will lean heavily on earnings from the Permanent Fund to help Alaska recover from the pandemic. 

According to his budget proposal, he wants to draw about $6.3 billion from the state’s permanent fund earnings — about half of that is part of the regular draw that would happen under state statute. The rest, he’s calling a one-time ask — saying he doesn’t intend to regularly lean on the fund to pay for large expenses. 

“But this year is different,” he said. “This year we have to get the economy back up off its knees and on its feet.”

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That figure is about $3 billion dollars above what the Legislature and the Permanent Fund Corporation have said is sustainable. 

He’s also asking the Legislature to quickly approve back-paying a full permanent fund dividend to Alaskans for 2020, which would be about $1,916. That would be an addition to the $1,000 dividend checks that already went out this year. And, he’s proposing that the legislature pay a full PFD in 2021. 

“That would come up to about $4,972 for Alaskans,” Dunleavy said. “Again we have the tools to do that this year. This is not something I’m proposing we’ll do every year.” 

He’s also proposing that the state borrow up to $350 million to upgrade or build new infrastructure across the state, pitching it as a way to put Alaskans to work and address record unemployment.

“Alaskans are suffering now, businesses are suffering now. This is a time for us to act. This is a time for us to act quickly.”

The state’s government has been hit hard by the ongoing COVID-19 pandemic, harder than many other states. The state’s budget deficit is now more than $2 billion and the politically divided legislature has struggled to agree on a solution to address it.

Reporter Andrew Kitchenman contributed to this story from Juneau.