Gov. Dunleavy signs budget, keeping forward funding for education and a $3,200 PFD

man in gray suit speaks into microphones
Gov. Mike Dunleavy speaks at a news conference Tuesday after signing the budget for fiscal year 2023, which starts Friday. (Wesley Early/Alaska Public Media)

Gov. Mike Dunleavy signed a state budget Tuesday that adds millions of dollars for public safety, K-12 education and the University of Alaska system. Plus, it pays each eligible Alaskan a Permanent Fund dividend of roughly $3,200.

The budget also includes $390 million to pay off the last oil and gas tax credits the state owes. 

Dunleavy, who’s running for reelection, highlighted spending levels at a news conference on the budget Tuesday afternoon.

“With the exception of investments in public safety and education, all of our agencies are at levels below what we came into in 2019,” he said. “So we’ve kept spending in check in much of our operating side of the budget.” 

The budget is fairly close to what was passed by the Legislature in May, though Dunleavy did veto about $780 million in spending before signing it, including roughly $112 million in school, university and statewide deferred maintenance. 

The budget will kick in on July 1 and goes through June 30 of next year.

Among the other items Dunleavy did keep in the budget: forward funding of K-12 education. That means $1.2 billion is set aside for schools for next fiscal year. In the first year of his term in 2019, Dunleavy had opposed forward funding education — and was sued by legislators. He said the way it’s done this year is different.

“This particular approach to forward funding has not just the idea of forward funding, but the actual resources behind it,” he said. “We have the money in hand, we have the surplus in hand to be able to do it. So that’s the difference.”

This year’s PFD, at about $3,200, is lower than what the 40-year-old state formula would’ve set. It’s still the highest dividend on record, second when adjusted for inflation. While Dunleavy campaigned on paying out a full statutory PFD, he said he’s been pushing lawmakers to adopt a 50-50 plan that would split the spending between dividends and government services. 

“I had said to the Legislature last year, ‘If we want to send to the people a 50-50 dividend change in the statute, we do that also with a constitutional amendment,'” Dunleavy said. “In other words, the people of Alaska get the opportunity to decide if they want a 50-50 to be able to fix this issue and have a formula going forward.”

Dunleavy said the dates for distribution of the PFD will be announced soon. 

Senate Minority Leader Tom Begich, D-Anchorage, said in a statement that Alaska “can move forward with this budget,” though he said it was “unfortunate that not all priorities were funded.”

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Wesley Early covers municipal politics and Anchorage life for Alaska Public Media. Reach him at wearly@alaskapublic.org.