Lawmakers, not a formula, set Alaska's dividend under 2017 ruling and 2018 draw limit

Alaska lawmakers, not a formula, set this week's Permanent Fund dividend, a power rooted in a 2016 veto and a 2017 court ruling.

Jason Brune, the Gov. Mike Dunleavy appointee who chairs the Alaska Permanent Fund Corporation board, told the Nome Common Council on Sept. 28 the statutory amount should have been around $4,000. "The legislature ultimately determined it was going to be $1,200 this year," he said, adding that the fund supplies 67% of the general fund budget.

On June 29, 2016, Gov. Bill Walker announced $1.29 billion in vetoes over a $4 billion shortfall tied to falling oil prices and production, capping the dividend at $1,000, about $666 million below the Legislature's amount. Residents received $1,022.

In 2017 the Alaska Supreme Court upheld the veto in Wielechowski v. State, argued by Sen. Bill Wielechowski. The court ruled that moving earnings into the dividend fund requires an appropriation subject to veto. "We conclude that the 1976 constitutional amendment does not allow the dedication of Permanent Fund income," Justice Daniel Winfree wrote.

Senate Bill 26, passed in 2018, made a percent-of-market-value draw, now 5% of the fund's average value, the combined limit for dividends and state spending but left the formula in statute. Dividends were $1,100 in 2017, $1,600 in 2018 and $1,606 in 2019, then ranged from $992 in 2020 to $3,284 in 2022, with $1,312 in 2023, $1,702 in 2024 (including a one-time energy relief payment) and $1,000 in 2025.

Last December, Dunleavy proposed a $3,650 statutory dividend, drawing $1.5 billion from the state's main savings account. Senate President Gary Stevens, R-Kodiak, said the proposal "depends on drawing down about half of our remaining savings." Lawmakers instead set $1,000 plus a $200 energy relief payment from fiscal 2026 general fund revenue above $6.3 billion.

In fiscal 2025 the draw supplied $3.66 billion, about 58%, of $6.34 billion in unrestricted general fund revenue, according to the Department of Revenue. This year's $1,000 dividend, with administrative costs, is budgeted at about $674 million.

Next year's amount will be set in the Legislature's next budget. Online applicants who chose direct deposit were paid Oct. 1. A second disbursement for those who filed paper applications or chose paper checks is scheduled for Oct. 22.