As oil prices and inflation rise, Dunleavy pushes for higher PFDs and bonds

Alaska Gov. Mike Dunleavy urges the Legislature to pass his PFD and construction bond package bills during a news conference on Feb. 17, 2022 in the Alaska State Capitol. (Photo by Andrew Kitchenman/KTOO and Alaska Public Media)
Gov. Mike Dunleavy urges the Legislature to pass his PFD and construction bond package bills during a news conference on Thursday in the Capitol. (Photo by Andrew Kitchenman/KTOO and Alaska Public Media)

Gov. Mike Dunleavy said higher state revenue and inflation mean that the Legislature should pass his proposals to pay higher permanent fund dividends and to borrow money to pay for capital projects.

“We can certainly afford a PFD that the people of Alaska expect,” he said on Thursday. “And given the inflationary rates, inflationary picture that we’re going through right now, I think, you know, we’re going to really ask the Legislature to give that due consideration as soon as possible.”

The state increased its forecast for oil and investment revenue. If the forecast holds up, the state would have a roughly $1.6 billion surplus over the next year and a half. 

Dunleavy wants the state to issue $325 million in bonds to pay for construction on ports, airports, fire halls and other projects.

Dunleavy has proposed a PFD of roughly $2,500, based on using half of the state’s annual draw from the permanent fund. He also proposed an additional $1,200 dividend payment, which is the difference between the 2021 PFD that was paid out and an amount Dunleavy proposed. He said the PFD could help Alaskans deal with inflation. 

He also said it would be good to borrow now, since interest rates are low and could go up. 

Some legislative leaders have questioned whether higher dividends are sustainable. And they have raised concerns that the state shouldn’t borrow for projects that it could pay for as part of the annual budget. 

 

Andrew Kitchenman

State Government Reporter, Alaska Public Media & KTOO

State government plays an outsized role in the life of Alaskans. As the state continues to go through the painful process of deciding what its priorities are, I bring Alaskans to the scene of a government in transition.

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