It’s day 75 of the 121-day legislative session, and there is no clear path to get out of town. The House Finance Committee finished hearing budget amendments and passed the FY2026 budget out of committee, but it’s $2 billion underwater with no mechanism to pay for the deficit. The House passed the FY2025 supplemental budget and sent to the Senate, but failed to garner the 30 votes needed to access the Constitutional Budget Reserve (CBR) to pay for it. Legislative Council voted to install metal detectors for visitors to the Capitol. The Department of Administration failed to meet its self-imposed March 31 deadline to release the long awaited salary study. And Deputy Revenue Commissioner Fadil Limani was abruptly dismissed on Friday (4/5/2025) with no explanation. 

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House Finance passes flawed operating budget. House sends unfunded supplemental budget to Senate

The following is an excerpt from this week’s edition of the Alaska Political Report. You can click here for more information about the Political Report. A subscription is $1,299/year per organization. Discounted pricing is available for non-profits and government entities. Our coverage of the budget starts with the governor’s proposed budget, and we track everything in detail through the entire process. If you have any questions or would like to subscribe, please email jeff@akpoliticalreport.com.

The House Finance Committee finished hearing budget amendments this afternoon (4/3/2025). After voting 4-7 against decreasing the Permanent Fund Dividend (PFD) to $1,000, the committee voted 6-5 to move the bill out of committee.

It’s an interesting move considering their budget is $2 billion underwater (it includes full statutory PFD), there is no funding mechanism to cover the deficit, and there is a nearly $80 million unallocated cut. How they work this out on the House floor will be interesting considering the House majority only has 21 members, the bare minimum, and two of the 21 members – Nome Democratic Rep. Neal Foster and Tooksok Bay Democratic Rep. Nellie Jimmie – support a larger PFD.

When asked about the structural issues with the budget, Anchorage Democratic Rep. Andy Josephson, who oversees the operating budget in the House, told the Political Report, “I believe there must be a CBR vote to get out of town. It may be that the minority will get something for that, but that’s how it works. It could come down to one vote if the supplemental budget and operating budget were merged into one. The PFD is a placeholder and is not going to be that large. It will likely be between $1,000 and $1,200.” When asked about how this budget will be fixed, he said, “This is why we have a conference committee, to work out these differences.”

Fairbanks Republican Rep. Will Stapp, a minority member who sits on the finance committee, told the Political Report, “I don’t even to what to say. Being in charge is hard.”

The committee had just three amendments remaining, but spent much of the day bringing previously tabled amendments back up. This morning, the committee spent about 30 minutes discussing an amendment that had a three-thousand-dollar impact on UGF spending. To date, amendments have cut about $45 million UGF from the committee substitute introduced a few weeks ago, and with a 25/75 PFD, the deficit would be roughly $400 million.

Today, the House passed the supplemental budget, which adds about $111 million UGF to the total FY2025 spending level. The bill funds emerging needs like disaster relief and wildfire fighting. It also covers areas where the budget enacted last spring isn’t sufficient to cover expenditures made by state agencies.

The House did not attain the 30 votes needed to access the Constitutional Budget Reserve (CBR) to fund the supplemental budget. CBR access can be included in the operating or capital budgets later in session but, until CBR access is added or another source is identified to cover the roughly $200 million deficit, the bill will be ineffective in meeting operational needs. The bill has been scheduled in the Senate Finance Committee for tomorrow morning.

If you would like to see the rest of this section, as well as our more detailed coverage of the legislative session, consider subscribing to the Alaska Political Report. Email jeff@akpoliticalreport.com for a copy of the latest special report. 

Other Happenings

The budget is not on tomorrow’s House calendar. Sources report that several members of the House majority are not happy the budget that came out the the House Finance Committee is $2 billion underwater due to the full statutory PFD. There is already talk that because the Senate is in possession of the supplemental budget the House passed, the Senate could go nuclear, load it up with everything else, and then send it back to the House as a take it or leave it. But that would still require 30 votes in the House to access the CBR. The Republicans don’t seem willing to do that. It’s increasingly looking like the Legislature won’t be able to pass a workable budget by the the last day of session. There are some options, but  things are not looking good.

Governor Mike Dunleavy (R – Alaska) was in Juneau this week. He has held multiple meetings with both Republican minorities, but has not been so accommodating with the majorities. Many are concerned about the lack of communication and seeming disinterest from Dunleavy to work with the majorities on a way to get of of town. 

This is unfortunate. They already awarded the contract to the company who will run the metal detectors in the Capitol. I predict this will have many unintended consequences. 

The Department of Administration (DOA) failed to release the long-awaited salary study. Earlier this session, they told the House State Affairs Committee they would release it by the end of March. In FY2023 the Legislature, responding to recruitment and retention concerns, appropriated $1 million UGF to DOA to conduct a study of state salaries and benefits. It was scheduled to be done by the end of last June. I, and others, have been trying to get it since. But they have consistently refused to release it. They provided a copy of a contract amendment issued to Segal that appears to be the cause of delay in public release of the final report. However, they redacted the scope of the contract amendment, citing executive communications and deliberative process privilege. Rachel Bylsma, Governor Dunleavy’s deputy chief of staff, sent a letter to commissioners informing them that the Governor’s Office has requested changes to the report and does not expect to release the report until the middle of session. The Alaska State Employees Association filed a lawsuit against the Dunleavy administration over the delay in the release of the study. The Dunleavy administration seems to be delaying long enough so recommended pay increases won’t get incorporated into the FY2026 budget. 

Another bad look from North Slope Borough Mayor Josiah Patkotak. 

Former legislative staffer Grace Ervine is back in Juneau. She is now working for Representative Chuck Kopp (R – Anchorage). the majority leader. She had been working as a special assistant to North Slope Borough Mayor Josiah Patkotak since January 2024. Welcome back, Grace!

On Friday evening, I learned that Revenue Commissioner Adam Crum fired Deputy Revenue Commissioner Fadil Limani. Limani had been in the role since January 2023. Here is his bio from the press release announcing his position:

DC Limani has an extensive background in tax, accounting, and finance, graduating from UAA’s accounting program and then working for KPMG for nearly five years before moving on to be Deputy Director of Finance for the North Slope Borough for seven years. While at the Borough, he worked on all elements of finance including Financial Reporting, Borough’s Bond Sales, Debt Service, Property tax, managing the Borough’s Central Treasury Investments and the Permanent Fund Investments including the Borough’s Annual Financial Statement Audits and the Borough’s 12-year financial forecast.

No reason has been give for his dismissal. There has been a lot of chatter that it stemmed from a recent meeting with Senator Dan Sullivan’s (R – Alaska) staff about the gasline, but it’s unclear exactly what happened. Limani had done much of the day-to-day work at Revenue and was known for his broad knowledge. It’s not going to be easy to recruit someone qualified to fill the role as Dunleavy will no longer be governor in December 2026, meaning it will likely be a short term job. 

And Revenue is likely going to be busy for the remainder of session. ANS Crude fell nearly $8 a barrel in two days at the end of the week. 

Representative Ky Holland (I – Anchorage) is dead on with this resolution. 

There was a big anti-Trump protest outside the Capitol yesterday in Juneau. There was a lot of singing and loose chanting. My favorite part was when one speaker said he no longer supports the constitutional four-year presidential term for “this guy” and had the crowd chanting “no more years.” They seemed to love the idea of overthrowing the government! But the speaker immediately after him spoke passionately about preservation of democracy. She and the crowd were really excited about democracy too! Talk about mixed messaging. 

This Week’s Loose Unit

This week was a real no-brainer. This week’s Loose Unit is Senator Lyman Hoffman. This Landmine article goes into more detail about how loose Lyman got this week. First, he sent out a memo instructing finance subcommittees to not make any additions, start any new programs, or accept and additions from Governor Dunleavy except ones related to Medicaid. This was not that loose. It’s what he did next that earned him Loose Unit status.

Hoffman showed up to the final meeting of the Senate Health Finance subcommittee, of which he is not a member. Finance subcommittees are more informal than standing committees and are not subject to the Committee on Committees – which decides committee membership. That being said, it’s hyper loose for the chairman to just show up to a subcommittee and vote on amendments, but Hoffman did just that. Maximum loose. 

The committee has five members, but with Hoffman there they had six. Hoffman was able to block two majority amendments that would have added spending by voting no. They both failed 3-3. If he had not been there, they both would have passed 3-2. While it was definitely a G move, it’s also Classic Loose Unit behavior. 

If you have a nomination for this week’s Loose Unit, or if you have any political news, stories or gossip (or any old pics of politicians or public officials) please email me at jeff@alaskalandmine.com.