The House passed the Fiscal Year 2026 capital budget, a $2.89 billion plan that reflects tight fiscal conditions while making targeted investments in infrastructure, energy, housing, public safety, and tourism.
The budget includes $2.384 billion in federal funds, approximately $161 million in unrestricted general funds, just over $46 million in designated funds, and $310.2 million in other state sources. The unrestricted general fund total represents a reduction of roughly $130 million from the governor’s proposal, or about a 45% cut.
“We worked hard to stretch every dollar to meet federal match, maintain vital services, and invest in areas like infrastructure development, deferred maintenance, public safety, clean water and sewer, and school infrastructure.” Said Representative Calvin Schrage (NP-Anchorage), Capital Budget Co-Chair of the House Finance Committee.
The FY26 capital budget supports over $1 billion in statewide transportation and infrastructure projects and allocates more than $500 million for water and sewer improvements in rural communities. It also prioritizes funding to address Alaska’s growing deferred maintenance backlogs at K-12 schools, university systems, courts, and public facilities.
“This budget shows what can be done with discipline and cooperation, but it also reveals the limits of our current financial constraints,” said House Finance Co-Chair Representative Andy Josephson (D-Anchorage). “Without new revenue, we are one downturn away from falling even further behind on basic infrastructure. These investments are important, but they are only part of the broader investment Alaska needs.”
The legislation also incorporates supplemental funding for FY25 capital items proposed by the Governor, including $65 million in federal funds for orphaned well remediation, urgent support for Alaska Marine Highway vessel maintenance, flood mitigation in the Mat-Su, and recreational trail investments.
“We’re meeting match requirements to leverage billions in federal funds, keeping our infrastructure functional, and investing in housing and energy solutions that will benefit communities across the state,” said Speaker Bryce Edgmon (I-Dillingham).
The bill now returns to the Senate for concurrence.
