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Alaska Gov. Bill Walker announced a veto Wednesday that will cap the state's Permanent Fund oil dividend for residents at $1,000 — less than half what they got last year just for living in Alaska.
NBC station KTUU of Anchorage reported that Walker's veto prevents $666.4 million from being transferred into the fund's earnings reserve. He said that the state can no longer afford the high dividends given annually from the $52 billion fund.
"If we don't make a change on the dividend program," Walker said, "it goes away in four years."
The fund, created by a state constitutional amendment, was designed in 1976 as compensation for the state and its residents after the Trans-Alaska Pipeline System was completed. It collects at least 25 percent of all money made from the pipeline's oil to be used for "income-producing investments" for the state, according to the fund's website.
Part of the fund, known as the earnings reserve, is distributed each year to Alaskan residents as the Permanent Fund Dividend distribution. Walker's veto will cap this dividend at $1,000 for the coming fall, less than half the amount residents received a year ago.
The Permanent Fund was designed to support future generations who could no longer have oil as a source of state income.
The governor also slashed government spending for tax breaks for the oil industry, education programs and infrastructure projects, totaling almost $1.29 billion in spending cuts, KTUU reported.