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Last week, Governor Dunleavy released his proposed budget for Fiscal Year 2027, which begins on July 1, 2026. The Governor's budget consists of the operating budget, which will fund ongoing state services, and the capital budget, which funds one-time infrastructure requests for things like road and transportation improvements. This budget marks the starting point in the budget process: the House and Senate Finance committees will spend most of session working on the budget and making amendments before the legislature passes it back to the Governor. At that point, he may choose to make line-item vetoes to reduce funding, but he may not add funding or re-appropriate funding.
The Governor has also submitted a substantial supplemental budget for approval. The supplemental budget will address lower-than-expected revenue for the current fiscal year, which ends June 30th. The decrease in revenue is due to lower oil prices.
The single biggest expense in the Governor’s budget is the Permanent Fund dividend. His budget includes a $3,650 dividend at a total cost of approximately $2.3 billion. This expense will require using over half of our $2.9 billion savings from the Constitutional Budget Reserve to pay the $1.8 billion deficit in the Governor's proposed budget. The Senate Majority will prioritize fiscal responsibility and a balanced budget as we revise this budget.
The following are some of the additional items funded in the Governor's FY27 proposed budget:
- $1.4 billion in full statutory funding for K-12 schools
- $10 million for the creation of a Department of Agriculture
- $40 million for disaster relief
- $350 million for public safety
- $34 million for fire suppression
- $13 million for the Alaska Industrial Development and Export Authority (AIDEA)
- $26 million for the Alaska Seafood Marketing Institute (ASMI)
- $98 million for behavioral health treatment
The Governor's released budget is just the beginning of the annual budget process. To stay up-to-date with the budget, click her.
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