Best solution to Alaska’s PFD ‘gorilla’ is to end the program with $10K payout, Walker argues

Former Alaska Governor Bill Walker, now running for governor again, has proposed eliminating the state’s Permanent Fund Dividend (PFD) program with a single $10,000 payout to each eligible resident. Walker argues the current system, which has led to years of budget disputes and unsustainable dividend demands, must end to address Alaska’s chronic structural deficit. The plan involves a one-time payment in 2027, contingent on voter approval via a question on the PFD application. Walker estimates the $6.2 billion cost—based on the current earnings reserve balance—would deplete much of the fund’s spendable reserves but eliminate future dividend obligations. This would free up approximately $1 billion annually starting in 2028, according to Walker’s revenue commissioner and running mate, Randy Hoffbeck. Walker’s proposal contrasts with past efforts, including Governor Mike Dunleavy’s annual budget proposals calling for dividends aligned with a 1980s statute, which lawmakers have repeatedly reduced due to fiscal constraints. The 2025 dividend saw over 618,000 applicants, with payouts as low as $1,000 last year and $1,200 this year. Hoffbeck described the dividend debate as a ‘600-pound gorilla’ in state politics, requiring either a new formula or complete elimination. Criticism has emerged from political rivals, including Democratic candidate Tom Begich, who called the plan ‘fiscally irresponsible’ and ‘fantastical.’ Begich argued that while Alaska’s education funding may be underfunded, residents are not ‘stupid’ and would reject such a drastic move. Walker’s campaign dismissed the criticism, emphasizing the one-time nature of the payout and its potential to resolve long-standing budget conflicts. The PFD program, funded by Alaska’s $89 billion Permanent Fund, has faced scrutiny due to declining oil revenues and shifting economic priorities. Walker’s proposal aims to avoid future disputes by offering a final payout, with eligibility restricted to current residents to prevent speculative migration. Hoffbeck noted the $10,000 figure was calculated based on the fund’s projected earnings reserve, though it would reduce the annual 5% draw rate. Walker and Hoffbeck plan to push the proposal through the Legislature if elected, framing it as a necessary step to stabilize Alaska’s finances. The plan’s success hinges on voter approval, with Walker suggesting alternatives like formula adjustments if the referendum fails.