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Alaska Senate Passes a Balanced Transitional FY 2026 Operating Budget
Budget Protects Savings and Provides a Fiscal Buffer to Prepare for Fiscal Year 2027
JUNEAU, AK— Today, the Alaska Senate approved a balanced and transitional operating budget for FY 2026. This budget secures essential services, prevents unsustainable draws from savings, and establishes a $150 million buffer to help the legislature weather the coming fiscal headwinds of $300–$600 million in FY 2027. The operating budget demonstrates a commitment to long-term financial stability while preparing the state for the challenging fiscal choices anticipated next year.
“We’ve passed a budget that reflects the situation we’re in, not the one we wish we had,” said Senator Lyman Hoffman (D-Bethel), Co-Chair of the Senate Finance Committee. “Revenue is down. Fixed costs are rising. We had to make choices that leave room to maneuver in FY27 to continue to provide resources to public education and maintain basic services.”
The FY26 budget makes targeted investments in education, public safety, and health care while maintaining spending control amid declining state revenues. The permanent fund dividend is set at $1,000, which equals a $685 million expenditure, showing the importance of the dividend program.
“The budget passed today brings balance to competing demands,” said Senator Bert Stedman (R-Sitka), Co-Chair of the Senate Finance Committee. “We’ve ensured core public services are protected while setting aside resources to cushion what we know will be a much more difficult financial picture next year."
The Senate’s targeted investments and protection of savings resulted in an operating budget that is $1.7 billion below the Governor's proposed budget from earlier this year and doesn’t require use of our rainy-day savings account, the CBR.
The operating budget now moves to the Alaska House of Representatives for a concurrence vote. From there, both chambers will appoint a conference committee to resolve the differences between the House and the Senate.
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