Big changes are coming for Alaskans! The Alaska House of Representatives has approved a new operating budget that includes $1,400 stimulus payments for eligible residents.
But the plan also comes with serious financial concerns, with a projected state deficit close to $450 million over the next two years. Now, the budget moves to the Senate for final approval.
Let’s break down what this means for families, schools, and the state’s future.
What’s Inside the New Budget?
The approved budget gives priority to school funding and state services, even though Alaska is facing a complicated financial situation.
Some key points include:
- $1,400 per person from the Permanent Fund Dividend (PFD).
- A one-time $253 million boost for education (unless a permanent stimulus increase is approved).
- $1.6 million for more state security officers.
- $1.5 million for adult disability services.
- $10 million for the Marine Highway System.
House members debated several amendments to cut spending, but most were rejected by the Democratic majority. Now, the Senate will have the tough job of trying to balance the budget.
The Deficit Challenge and Controversy
One of the most controversial parts of the budget is a $79 million unallocated cut, which gives Governor Mike Dunleavy the power to make spending reductions without specific instructions from lawmakers. Some experts even warned that this could be unconstitutional.
If this cut isn’t made, the deficit would rise above $500 million, making Alaska’s financial situation even worse.
Republican lawmakers called the budget a “fiscal mirage,” criticizing it for not addressing the deficit properly. But Democratic Rep. Andy Josephson defended the plan, saying that many services are already underfunded after years of cuts.
To cover the deficit, the House also approved withdrawing $2.8 billion from the state’s savings. However, that decision needs a super majority vote (three-quarters of both the House and Senate), and the Republican minority could block it.
Meanwhile, Senate leaders prefer raising oil taxes instead of using savings, but that proposal faces tough opposition in the House.
What Is the Alaska PFD Stimulus Program?
The Alaska Permanent Fund was created in 1976 to save a portion of the state’s oil revenues for future generations. The fund is invested in things like stocks, bonds, and real estate.
Since 1982, Alaskans have received a yearly dividend payment from the fund’s earnings. Originally, the amount was based on a five-year average of the fund’s returns. But since 2018, the Legislature has decided the payout amount during budget talks, often adjusting it to help with state spending needs.
Who Can Get the PFD?
To qualify for the 2025 PFD:
- You must have been an Alaska resident for all of the previous calendar year.
- You must plan to stay in Alaska permanently.
- You must not have been away from Alaska for more than 180 days (unless for reasons like school, health, or military service).
- You must not have been incarcerated or have serious criminal convictions.
- Minors need a parent or legal guardian to apply on their behalf.
The PFD is an important financial support for many families, helping cover essentials like food, rent, and energy bills.