With unexpected oil revenue flooding the state coffers to the tune of a $3.6 billion increased revenue forecast over this year and next year, Gov. Mike Dunleavy is calling on lawmakers in Juneau to issue $3,700 Permanent Fund Dividends to all eligible Alaskans.
In a March 15 notice, Dunleavy requested that the Legislature use some of the surplus to get immediate relief to Alaskans facing skyrocketing fuel costs and 40-year record inflation.
“Rising oil prices are benefiting government finances and hurting Alaskans,” Dunleavy said. “I’m asking the Legislature to help alleviate economic hardship for Alaskans now, by paying every eligible resident a PFD this year of at least $3,700. We must get funds into the hands of Alaskans now when the bills are due, not in a month’s time.”
Deputy Commissioner of Revenue Brian Fechter said current market conditions present a “tremendous opportunity to use this additional revenue to provide relief to Alaskans currently grappling with high inflation all while putting billions into savings to deal with future price volatility.”
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The Unrestricted General Fund (UGF) revenue forecast has been increased by $1.2 billion for FY 2022 and $2.4 billion for FY 2023. Forecasts for revenue have also been increased for all years beyond FY 2023.
“Under the 10-year outlook, we can have surpluses while paying the PFD,” Dunleavy said. “We can also rebuild our savings with these surpluses in the range of $11 billion over ten years, based on a conservative forecast of $70 plus per barrel to 2031.”
The revenue forecasts are based on Alaska North Slope crude oil prices of $91.68 a barrel for FY 2022 and $101 for FY 2023, stabilizing at $77 by FY 2031.
In FY 2021 Alaska crude oil production was 486,000 barrels per day. That’s expected to drop to 481,800 barrels a day in FY 2022 and then gradually climb to 576,600 barrels a day by FY 2031.
Dunleavy has placed the PFD question squarely in the Legislature’s court, saying he can’t choose the amount of the PFD this year, but lawmakers can.
“Only the Legislature can make this happen,” Dunleavy said. “We have the resources. We have the duty to do something to help now. Alaskans are paying the price in these uncertain times.”