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Senate Passes FY26 Capital Budget Prioritizing Deferred Maintenance, Safety Upgrades, and Essential Infrastructure Through Strategic Spending
Juneau, AK — Today, the Alaska Senate passed the Fiscal Year 2026 Capital Budget, Senate Bill 57, advancing a $2.9 billion plan emphasizing statewide infrastructure maintenance, public safety upgrades, and essential infrastructure investments. The capital budget includes $162 million in UGF spending—$119 million less than the Governor’s proposal—achieved through targeted reductions, fund reappropriations, and a strategic increase in the Alaska Industrial Development and Export Authority (AIDEA) dividend.
Highlights from the FY26 Capital Budget include:
- $36 million for deferred maintenance, including:
- $19 million for K-12 school major maintenance
- $5 million for University of Alaska facilities
- $1.4 million for Mount Edgecumbe High School Maintenance
- $750,000 for judiciary facility needs
- $10 million for statewide emergent repairs
- 26 new capital projects totaling $89 million, including:
- Fairbanks Public Safety Evidence Facility remodel, replacing unsafe mold-ridden storage currently in use
- Renewable Energy Fund projects in Pelican, Naknek, Skagway, Kwethluk, Quinhagak, and Nenana
- Alaska Marine Highway vessel maintenance ($26 million in fare revenue)
- Dalton Highway (Haul Road) maintenance
- Port electrification for cruise terminals
- Courthouse security upgrades and law enforcement equipment purchases
- IT modernization across several departments (Administration, Law, Revenue, Labor)
- Rental and senior housing assistance, including support for domestic violence victims
- Reappropriation of $47.1 million in unused capital funds from prior projects
- Reallocation of $20.9 million in unused federal highway and airport match funds
- Increase in the AIDEA dividend from 30% to 50% of net income, generating $12.5 million in additional revenue
“This year’s capital budget focuses on Alaska’s most pressing infrastructure needs—especially in deferred maintenance and public safety. We prioritized essential statewide services over district-specific projects, removed several items from the Governor’s budget, and responsibly used existing funds to reduce the burden on the general fund,” said Senator Bert Stedman, R-Sitka, Finance Capital Budget Chair. “It’s a lean, strategic budget, but the road ahead will be even more challenging.”
Senate Bill 57 now heads to the House of Representatives for consideration.
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