Sen. Donny Olson, D-Nome, is filing a bill for the upcoming legislative session that adds $500 million of the expected state surplus into the principal of the Alaska Permanent Fund to increase future dividends.
The money would come from the $1.12 billion in surplus oil money the Alaska Department of Revenue expects for the next fiscal year.
The one-time deposit could add $10 to each dividend in the first few years, $20 by year five and $40 after 10 years, according to Olson and the Alaska Permanent Fund Corp.'s projections.
"If we get a $1.2 billion surplus, it should not be all left to the Legislature to spend," said Olson, one of two Democrats on the Senate Finance Committee.
Because the next session falls during an election year, Olson said he expects a lot of money will be spent in individual districts. If that is the case, the senator wants a third to one-half of the surplus to benefit all Alaskans, he said.
Gov. Frank Murkowski proposes spending $586 million from the surplus for future education needs, $400 million on equity for a natural gas pipeline and $130 million for deferred maintenance, public safety and correction needs, while $32 million would be left for emergencies.
Olson said he supports education funding but is critical of the amount the governor suggests and has concerns about the gas line proposal the governor and three oil producers are considering.
"I think a lot of us hope to save some of the surplus," said Sen. Gary Wilken, R-Fairbanks, who co-chairs the Senate Finance Committee.
Wilken considers the $400 million the governor wants to set aside for the pipeline as savings, but he said Olson's idea is "certainly worthy of discussion."
The deal-breaker may be how Olson proposes to shuffle the governor's spending priorities to find room for his $500 million permanent fund deposit, Wilken said.
Olson said he needs to review the governor's budget bill first before making his case.
Andrew Petty can be reached at firstname.lastname@example.org