The Alaska Legislature adjourned its 2025 session on Tuesday, one day ahead of the constitutional deadline, after passing a lean state operating budget and resolving a challenging fiscal outlook driven by falling oil revenue.
The approved budget for the fiscal year beginning July 1 includes a $1,000 Permanent Fund Dividend — the lowest inflation-adjusted payout since the program’s inception in 1982. Despite tight revenues, the spending plan ends with a projected $57 million surplus, though lawmakers cautioned that surplus could quickly vanish if oil prices stay below expectations.
The operating budget reflects months of negotiation between the House and Senate and includes significant funding for education, child care, public safety, and behavioral health. Lawmakers overrode the governor’s veto of a bipartisan education bill, ensuring a $700 increase to the Base Student Allocation. Additional investments support teacher recruitment, mental health services, and early childhood programs.
To close a roughly $200 million shortfall in the current fiscal year, the Legislature approved a draw from the Alaska Industrial Development and Export Authority and a higher education fund, after a proposed savings draw failed in the House. The Senate cleared the savings vote, but it fell short of the required supermajority in the House.
Governor Mike Dunleavy has not yet said how he plans to address the remaining budget gap, though speculation remains about potential vetoes or fund reallocations.
Overall, the session was marked by bipartisan cooperation within the House Majority Coalition, which advanced priorities ranging from fisheries reform to digital tax modernization, while also approving a capital budget focused on deferred maintenance and infrastructure.