Alaska Senate Passes a Balanced Budget

Compromise budget deal avoids spending from savings and will pay out a healthy PFD.

Tonight, the Alaska State Senate passed an amended version of the state budget for Fiscal Year 2024. The Senate’s version of the budget increases education funding outside the formula by $174.9 million, which is the single largest increase in state history. The compromise budget also provides Alaskans with a $1,300 permanent fund dividend while leaving the state with an $84.2 million surplus. The Senate budget is balanced based on the governor’s spring forecast revenue projections of an average of $73 per barrel of oil without dipping into the state’s significantly low reserves savings account, the Constitutional Budget Reserve (CBR), or passing any additional tax measures.

“This budget is not only reasonable, but it is also responsible,” said Senate President Gary Stevens. “The hard work that members of Senate Finance made it possible to find solutions to balance the budget and provide a path to pay back our savings, all without spending down our savings, which is commendable.”

The compromise budget approved by the Senate provides a path to repay the CBR account, which the legislature is constitutionally obligated to do. If incoming revenue exceeds projections, the first $636 million is split between a 2024 energy relief payment of up to $500 for every eligible Alaskan and deposits into the CBR. This occurs if the average price per barrel of oil in FY 24 averages between $73 - $83 per barrel. Any additional revenue above an average of $83 per barrel is deposited into the CBR.

“We have a balanced budget at $73 per barrel of oil with the single largest education funding increase in history and a reasonable dividend,” said Senator Bert Stedman, R-Sitka, Operating Budget Chair of the Senate Finance Committee. “By pursuing these goals of a balanced budget, being fiscally responsible, and getting our children educated along the way, we can increase the financial strength of the state. This will lower our cost of borrowing and possibly increase the state’s credit rating.”

The Senate’s version of the operating budget includes the state’s capital budget, which maximizes federal dollars while preventing overspending. While constructing the capital budget, the Senate Finance Committee took into consideration five goals: 1) balance the budget, 2) maximize federal funds and provide grant writers for communities the ability to secure federal grants, 3) establish food security and resource preservation, 4) strengthen state-wide energy programs, and 5) address our deferred maintenance needs.

Before the Senate passed the budget, the body added additional revenues for Head Start, renewable energy projects, community-based waiver services, and child care grants.

Tonight the Senate adjourned the special session and anticipates the House of Representatives to concur with the budget.