Alaska Legislature reaches a last-minute compromise budget deal

The budget deal prevents a government shutdown and includes an additional $175 million for public education in Alaska.

May 19, 2023

Last night, the 2023 legislative session ended with a last-minute compromise budget deal that was approved despite significant policy disagreements between the two bodies and the Governor. Passing the budget prevents a possible government shutdown and protects the jobs, education, healthcare, and safety of the people of Alaska.

I supported the budget deal even though it required me to vote to accept cuts to things I support. The deal included a reduction in oil tax credit payments from $55.7 million down to $28.35 million. All told, the budget deal included over $82 million in reductions. For instance, funding for the Child Care Development Fund block grants was reduced by $7.5 million, and funding for Home and Community-Based Senior Grants was also reduced by $7.5 million. These reductions were requested by the House Majority in an effort to reach a compromise. Many of us objected to these cuts to essential community services, but balancing the impacts of a full government shut town to requested House reductions resulted in a recognition that shut down state government would have broad, devastating impacts.

Another aspect of the budget deal agreed to tonight was the addition of $66 million in capital budget items, including:

$9 million was added to the funding for Renewable Energy Grants.
$1.5 million was added to help pay for the next Arctic Winter Games.
$300,000 for new exterior doors at the UAA Social Sciences Building.
$1.4 million for trails in Alaska, including $1.1 million for the Indian Valley Trail reroute.

The budget approved tonight was built on the anticipation that North Slope oil will average $73 per barrel in the next fiscal year. If oil prices are higher, the budget deal calls for the extra revenue to be split equally between the Constitutional Budget Reserve and an energy relief payment for Alaskans that receive a Permanent Fund Dividend. The energy relief payment will be limited to $500 per eligible Alaskan.

All session long my number one priority and the number one priority of the bipartisan Alaska Senate Majority has been to invest in our public education system, which is struggling to meet the needs of our students due to years of unaddressed inflation and a nationwide shortage of teachers and qualified education professionals. The budget deal passed tonight includes a one-time outside the foundation formula increase of $175 million for Alaska's public schools on top of the $1.2 billion we annually appropriate for public education. This additional education funding will help our school district address inflation, which has eroded the purchasing power of our local schools, but it is not the sustainable funding we were hoping to secure. Senate Bill 52 is still in House Finance and the amended Senate Bill 140 is in House Rules. I look forward to getting back to Juneau to fight for our kids.

Neighbors, I am proud of the work that the leadership of the Alaska Senate Majority did in reaching last night’s budget deal, which originally passed the Senate by a vote of 17-3. They were always willing to negotiate and never drew lines in the sand. Thankfully, a majority of my colleagues in the House also saw the wisdom of compromise. The budget passed the House last night by a vote of 26-14.