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Alaska residents will receive just over $1,000 each from the state’s Permanent Fund after a budget deficit prompted a cut to the yearly payment.

In a video message posted to social media on Friday, Governor Bill Walker announced that Alaskans will receive $1,022 each from the state’s Permanent Fund.

Walker said that amount is in line with a historical average of about $1,140 paid out since the program’s inception in 1976.

This year’s payment is about half the amount residents were slated to receive before a multi-billion budget shortfall prompted Walker to cut payments.

Residents were initially slated to receive about $2,100 each before the cut.

Last year, residents received a record-high payment of $2,072 payment, up from just over $1,800 the previous year.

In his message, Walker addressed the divided payment cuts, calling the move a “tough decision.”

 

Two years of low oil prices have begun to squeeze the Permanent Fund’s coffers.

“We lost 80 percent of our income over the last two years that resulted in a $4 billion deficit. We asked the legislature for help to pass some legislation to balance the budget to get us out of the deficit and unfortunately that didn’t happen,” Walker said.

Earlier this month, Alaska state senator Bill Wielechowski and former state senator Rick Halford filed a lawsuit challenging the dividend cut.

The lawsuit is seeking a court order that will force the Permanent Fund to transfer the full $1.4 billion initially earmarked for the payments, the Alaska Dispatch News said.

Walker acknowledged that the dividend cut is unpopular but said he trimmed the payment in hopes of safeguarding the program’s longevity.

“We cannot continue on without making some changes because, if we do, it will be very, very uncomfortable in a few years ahead….If we don’t fix the dividend everything indicates that it will go away in the next couple of years,” Walker said.

The payment amounts are calculated using a formula that averages the fund’s earnings over a five-year period.

Residents must live in Alaska for a full calendar year before they are eligible to receive payments.

Residents will begin receiving their payments on October 6.