Alaska governor limits annual oil-wealth checks to $1,000

ANCHORAGE, Alaska – Facing a multibillion-dollar deficit, Alaska’s governor on Wednesday cut in half the annual checks that give all residents a share of the state’s oil wealth, but he kept enough money in place to award everyone a $1,000 payout.

Gov. Bill Walker’s administration said the checks had to be reduced in order to save the program.

The veto “preserves that ability to provide a check to every citizen in this state forever,” his budget director, Pat Pitney, said.

If nothing was done, Walker said the Alaska Permanent Fund – worth about $52 billion – would have been depleted in four years.

Jeffrey Ganotisi, 38, took some time off from painting a house on Wednesday to fish for king salmon in Ship Creek, which winds through downtown Anchorage. He had already heard the news that the governor is cutting the check in half, and he didn’t like it.

His wife is pregnant with their third child and is due in September. The dividend checks are cut in early October every year.

“We were going to use it for diapers and all that kind of stuff, but it’s going to be kind of tight,” he said.

Every year, they put some money away in their kids’ college fund and use some to stock up on food. It helped last year when nearly every single Alaskan received a record amount, $2,072 each or nearly $8,300 for a family of four.

“Now that they’re cutting it down, it’s going to hurt a little bit ’cause I have a feeling they’re going to keep cutting it down,” Ganotisi said.

Alaska’s government relies mostly on revenue from oil production to stay solvent. But declining production and a precipitous drop in oil prices have left the state with a deficit of more than $3 billion for the next budget year.

If changes were not made, Walker has warned, the oil-wealth program could disappear. He introduced a bill earlier this year capping the checks at a $1,000 to help pay down the deficit. The state Senate passed the measure, but the House couldn’t get the bill out of committee before adjourning a special session last month.

Walker’s reduction of the oil-check purse was among $1.3 billion in budget vetoes that he said would result in savings across much of state government.

AP-WF-06-29-16 2313GMT