Former Gov. Bill Walker, running to again be Alaska’s top elected official, would like to end the Permanent Fund dividend program with a one-time $10,000 payment to each eligible Alaskan.

“We are in this to solve significant issues,” Walker said in a phone interview Friday. “Business as usual just isn’t going to work.”

Alaska has faced a structural deficit — that is, more expenses than revenue — for years. A sharp decline in oil prices in the mid-2010s, during Walker’s first term in office, led him to take the unprecedented step of vetoing part of the Permanent Fund dividend in 2016. Ever since, lawmakers have spent much of their energy each year wrangling over the amount of the dividend.

Though Gov. Mike Dunleavy proposed a dividend in line with a 1980s statute in each of his annual budget proposals, lawmakers consistently approved far smaller payouts — $1,000 last year, and $1,200 this year — with legislators on both sides of the aisle saying the dividend formula is no longer realistic.

“The dividend discussion has been the 600-pound gorilla in the room,” said Randy Hoffbeck, Walker’s former revenue commissioner and running mate.

With the existing formula calling for “financially impossible” dividends, there are two choices, Hoffbeck said.

“We can cage the gorilla with a new formula that better reflects our current economic situation and our fiscal situation, or we can actually remove the gorilla from the room,” he said.

Walker envisions asking Alaskans to endorse the idea with a question on the application for the 2027 Permanent Fund dividend, he said.

“If it’s overwhelmingly, ‘Yes, we like it,’ then we would proceed to the Legislature with legislation,” Walker said. “If it’s not, then we will continue with, probably, looking at a formulaic modification in some way that reflects our current fiscal situation.”

Alaskans would be free to spread the payment over multiple years to avoid a large tax bill, Walker said. And it would be a one-time offer in an effort to avoid people moving to Alaska on a short-term basis to cash in.

“If we paid it out in 2027, people would already have to be here to be eligible,” Hoffbeck said.

Ending the dividend with a one-time $10,000 payment would certainly “stress” the fund, he said. With more than 618,000 applicants for the 2025 dividend, the plan would cost about $6.2 billion.

That’s roughly what would be left in the Permanent Fund’s earnings reserve account, which can be spent with a majority vote of the Legislature and the consent of the governor, after transfers for dividends, government services and inflation-proofing this year and next year, according to figures from the Alaska Permanent Fund Corp., which manages the state’s $89 billion nest egg.

“The $10,000 isn’t a random number,” Hoffbeck said. “It’s a calculated number on what is possible with the current earnings reserve balance.”

But it would go a long way toward erasing the structural deficit, Hoffbeck said. He estimated that beginning in 2028, ending the deficit would free up about $1 billion in revenue.

“Even though it has a depressing effect on the (annual 5% draw), it’s more than offset from the benefits of not having to pay the dividend,” Hoffbeck said.

Walker’s proposal drew criticism from some of his competitors in the governor’s race. Democrat Tom Begich called the plan “fiscally irresponsible” and “fantastical,” comparing it to Dunleavy’s unfulfilled campaign promise to deliver full dividends. It’s the Legislature, not the governor, that sets the maximum amount of the dividend each year, Begich said.

“We may have underfunded education in this state, but Alaskans aren’t stupid,” Begich said.

Walker and Hoffbeck rejected the criticism, insisting the key difference is that their proposal would provide a one-time payment. They said they’d work with the Legislature to push the proposal through if elected.