The Alaska House of Representatives has approved a $6.2 billion draft state operating budget, contributing to a projected deficit for the upcoming fiscal year, as reported by the Alaska Beacon. When combined with the Senate’s capital budget draft and a planned supplemental budget to address the current year’s deficit, total general-purpose spending is estimated to be around $6.6 billion. However, the Alaska Department of Revenue anticipates only $6.1 billion in general-purpose revenue for the upcoming fiscal year, leading the House to propose drawing from the Constitutional Budget Reserve to balance the budget.
House Majority Leader Chuck Kopp stated that the passed budget is subject to change by the Senate and is the best current option. The House voted to reduce the 2025 Permanent Fund dividend to $950 million, in an effort to curb the deficit. One major increase in the budget is an $86 million boost to K-12 public school funding, including a one-time $1,000 increase to per-student funding. Lawmakers are aiming for a budget that supports growth and prosperity in the state.
Despite the passage of the budget along caucus lines, with the majority in favor and the minority against, concerns about the sustainability of the budget remain. Senate leaders have expressed their intention to pass a budget without relying on savings, given the projected decrease in revenue from North Slope oil prices. The Senate’s approach to balancing the budget at the lower oil price remains to be seen, with Sen. Bert Stedman emphasizing the need for difficult decisions to address the fiscal challenges ahead.
Source
Photo credit www.alaskasnewssource.com
