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Last week, Governor Dunleavy released his proposed budget for Fiscal Year 2025, which begins on July 1st. The Governor's budget is a starting point that the legislature will review and revise. The legislature is likely to make significant changes.
The FY25 operating, mental health, and capital budgets total $13.9 billion. This budget includes $6.3 billion in Unrestricted General Funds (UGF), $713 million in Designated General Funds (DGF), $2.3 billion in Other State Funds, and $6.3 billion in federal funding.
The proposed budget contains no increase in funding to public schools and no increase to the Base Student Allocation. In contrast, much of the discussion in communities across Alaska and in the legislature during the last session revolved around increasing the Base Student Allocation. When adjusted for inflation, we have been flat-funding our schools for several years. The Anchorage School District and other districts have stated that the lack of investment in our public schools has reached a crisis level.
The Governor's budget includes a full statutory dividend of $3,400, which creates a deficit of $1 billion dollars. To fill this budget gap, the Governor proposes using the Constitutional Budget Reserve, which he describes as Alaska's "rainy day fund." Alaskans are already raising questions about whether we would use almost half of our $2.7 billion savings to pay the deficit in the governor's proposed budget. The Senate Majority plans to seriously revise the Governor's budget to prioritize fiscal responsibility.
The following are some of the spending increases in the governor's FY25 proposed budget:
- Funding for 10 additional Village Public Safety Officers (VPSO) and to increase VSPO salaries
- $5 million to food banks and food pantries
- $25 million for Alaska Housing Finance Corporation (AHFC) Downpayment Assistance Grants
- $62.6 million for AHFC annual housing programs
- $2.5 million for Statewide PFAS Fleetwood Equipment Foam Replacement
- $1.9 million and 10 positions to expand consumer protection investigations, address child protection cases, assist with drug prosecutions and assist with grand jury investigations.
The following are some highlights in the governor's FY25 proposed capital budget:
- $1 billion in federal funding for Broadband Equity Access and Deployment Program
- $3.9 million for School Construction Grant Funds
- $4.3 million in Major Maintenance Grant Funds
- $22 million in state match funds to leverage $242 million in federal funding for Village Safe Water and Wastewater Infrastructure Projects
- $92 million in federal funding to replace the Tustumena Ferry
- $915,000 for contracted urban snow removal when unexpected snowfall exceeds existing operational capacity.
- $2.2 million for the proposed Carbon Capture & Sequestration Project
- $1 million for Court Security Projects
For a summary of the governor's proposed FY25 budget, please click here.
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