Alaska House Approves Limited Capital Budget Amid Economic Challenges

On May 12, 2025, the Alaska House of Representatives approved a modest capital budget for the upcoming fiscal year beginning July 1. This decision, mirroring a prior vote in the state Senate, passed with a narrow 21-19 margin along caucus lines.

The approved Senate Bill 57 allocates just $167.9 million in general-purpose funds for construction and renovation, a stark contrast to previous years when the budget often exceeded $700 million. Rep. Calvin Schrage, I-Anchorage, who co-chaired the House Finance Committee, acknowledged the tough fiscal climate, stating, “This was not a fun or easy year… We had to say no — or at least not now — to a lot of good projects that would have benefited Alaskans.”

Despite the limitations, the budget includes notable investments, such as $57.2 million earmarked for the Alaska Department of Transportation, paving the way for more than $2 billion in federal transportation funding. However, uncertainty looms regarding potential federal budget cuts and their impact on state funding.

In light of restricted revenues, both legislative bodies focused on addressing deferred maintenance projects. The Senate approved an additional $19 million for public school maintenance, matched by the House’s equivalent contribution.

Sen. Bert Stedman, R-Sitka, commented on the bipartisan approach, saying, “Everybody got nothing” regarding discretionary funding requests. One exception was a $500,000 allocation for a Blood Bank of Alaska testing lab, which the House reinstated after the Senate initially rejected it.

The budget will now return to the Senate for a concurrence vote before advancing to Governor Mike Dunleavy, who holds the authority to make line-item vetoes.