ANCHORAGE, Alaska (AP) — Facing a multibillion-dollar deficit, Alaska’s governor on Wednesday cut in half the annual checks that give all residents a share of the state’s oil wealth, but he kept enough money in place to award everyone a $1,000 payout.

Gov. Bill Walker’s administration said the checks had to be reduced in order to save the program.

The veto “preserves that ability to provide a check to every citizen in this state forever,” his budget director, Pat Pitney, said.

If nothing was done, Walker said the Alaska Permanent Fund — worth about $52 billion — would have been depleted in four years.

Jeffrey Ganotisi, 38, took some time off from painting a house on Wednesday to fish for king salmon in Ship Creek, which winds through downtown Anchorage. He had already heard the news that the governor is cutting the check in half, and he didn’t like it.

His wife is pregnant with their third child and is due in September. The dividend checks are cut in early October every year.

“We were going to use it for diapers and all that kind of stuff, but it’s going to be kind of tight,” he said.

Every year, they put some money away in their kids’ college fund and use some to stock up on food. It helped last year when nearly every single Alaskan received a record amount, $2,072 each or nearly $8,300 for a family of four.

“Now that they’re cutting it down, it’s going to hurt a little bit ‘cause I have a feeling they’re going to keep cutting it down,” Ganotisi said.

Alaska’s government relies mostly on revenue from oil production to stay solvent. But declining production and a precipitous drop in oil prices have left the state with a deficit of more than $3 billion for the next budget year.

If changes were not made, Walker has warned, the oil-wealth program could disappear. He introduced a bill earlier this year capping the checks at a $1,000 to help pay down the deficit. The state Senate passed the measure, but the House couldn’t get the bill out of committee before adjourning a special session last month.

Walker’s reduction of the oil-check purse was among $1.3 billion in budget vetoes that he said would result in savings across much of state government. He compared the cuts to running through fire.

“The fire is the future of Alaska,” the governor said.

After a news conference, Walker told The Associated Press that he runs the risk of having lawmakers override his budget vetoes because he’s called them back into session beginning July 11, but that’s not his intent.

“You know, I’ve pulled them back in special session so we can finish the job. If they take that time to override my vetoes, there’s nothing I can do about that,” he said. “I’ve done everything I can do.”

Walker said lawmakers complained to him that if the oil checks were reduced, they wouldn’t be re-elected this year in the fall elections. He said his veto alleviates them of that concern. Walker, a first-term independent, doesn’t face re-election this year.

Walker has proposed several measures to help bridge the gap, including tapping into the oil-wealth fund, which has paid a dividend yearly since 1982. He’s also proposed reinstituting the state income tax for the first time in decades.

Associated Press Writer Rachel D’Oro contributed to this report.

First Published: June 29, 2016, 4:00 a.m.
Updated: June 29, 2016, 11:12 p.m.