Supplemental Budget Update
The supplemental budget adds funding for the current year's budget that began on July 1, 2025 and ends June 30, 2026. Governor Dunleavy requested all of the items in the supplemental budget, which adds funding for essential state services like wildfire suppression and disaster relief. The state has already spent some of this funding.
The supplemental budget includes $70 million in transportation funds that are needed to unlock $630 million in federal transportation funding. The Governor vetoed this $70 million in federal matching funds in the summer of 2025, then requested the same $70 million in his supplemental funding request in December 2025. The 9-1 federal matching funds are critical for Alaska's transportation sector, which relies heavily on state contracting for transportation projects. Without the federal matching funds, the construction industry anticipates negative impacts to the 2026 summer construction season.
This week, the House voted to pass the supplemental budget by a vote of 24 to 16. But they failed to approve funding for the bill from the Constitutional Budget Reserve, which requires a 3/4 vote, or 30 out of 40 House members in support. Next, the supplemental budget will move to the Senate, which will review and may make additional changes. If the Senate approves the supplemental budget and approves funding for the budget with a 3/4 vote, it will go back to the House for a concurrence vote. At that point, the House will have another chance to approve funding from the Constitutional Budget Reserve.
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