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Summary of Governor Dunleavy’s Proposed Budget
Budget Overview:
Governor Dunleavy released his budget proposal on December 11, 2025. The plan projects approximately $15.3 billion in total state revenue, including close to $6.2 billion in unrestricted general funds. With expenditures exceeding revenues, the budget would require a draw of roughly $1.5 billion from the Constitutional Budget Reserve, nearly half of the state’s remaining savings. Similar approaches have been proposed in past budgets under this administration, which the Legislature has ultimately had to make changes to.
Permanent Fund Dividend (PFD):
The proposal includes a full statutory Permanent Fund Dividend, estimated at about $3,650 per resident, which would be among the largest in Alaska’s history.
Fiscal Context and Debate:
The proposal underscores Alaska’s ongoing fiscal challenges, driven by declining revenues, inflation, and decreased oil prices. Reliance on savings and a large dividend has already raised concerns among lawmakers in past debates, who argue that funding a full PFD, while risking underfunding essential state services, is not a sustainable plan for Alaskans now, and for generations in the future.
Outlook:
As we’ve seen in previous years, a budget centered on a full PFD amid declining oil prices is widely viewed as unmanageable and unrealistic. The Legislature will work to revise the proposal to better balance long-term fiscal stability with essential services, while potentially including new or revised revenue measures during the upcoming session.
Additional Items Funded in the Governor’s FY27 Proposed Budget:
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$1.4 billion for full statutory funding of K–12 schools
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$350 million for public safety
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$98 million for behavioral health treatment
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$40 million for disaster relief
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$34 million for fire suppression
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$26 million for the Alaska Seafood Marketing Institute (ASMI)
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$13 million for the Alaska Industrial Development and Export Authority (AIDEA)
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$10 million for the creation of a Department of Agriculture
For a more comprehensive look at the Governor’s proposed budget, visit: https://gov.alaska.gov/fy26-governors-proposed-budget/
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