Without any significant fanfare, or as far as we can determine, public discussion, Senate Joint Resolution 29, a proposed constitutional amendment which would establish a constitutionally dedicated fund, the proceeds from which could be used “only for public education,” passed the Senate last week, just a little over two weeks after its introduction, by a vote of 17-3. 

The proposed amendment was introduced by the Senate Finance Committee on March 13, referred only to that committee, and subsequently heard only twice in that committee before being advanced out eleven days later by a vote of 5 “Do Pass,” 2 “No Recommendation.” Even as of the time we are writing this week’s column, a week after its passage from the Senate, there is nothing in the “Documents” section of the bill history that analyzes or even discusses the impact of the proposal, other than a fiscal note from the Division of Elections indicating that adding the proposed amendment to the general election ballot would cost zero.

Some suggest that the speed at which the proposed amendment has been handled and the lack of public analysis are by design to prevent Alaskans from assessing its potential impacts.

Having passed the Senate, the resolution has been received by the House, where it has been referred only to the House Finance Committee for hearing. 

As a proposed constitutional amendment, SJR 29 requires the approval of “a two-thirds vote of each house of the legislature” before being forwarded to the lieutenant governor for placement on the next general election ballot. That level has already been achieved in the Senate. It will require the affirmative votes of 27 in the House for adoption there. The governor cannot veto and plays no other formal role in constitutional amendments. Whether to propose such an amendment for public approval is entirely a legislative function.

According to news reports, the amendment appears to be intended as a precursor to future tax proposals. The story about the proposed amendment appearing in the Anchorage Daily News explains the purpose of the amendment in this way, quoting Senate Finance Committee Co-Chair Senator Lyman Hoffman (D – Bethel):

‘In the past, legislators have been reluctant to initiate taxes because they do not know where those dollars would be appropriated by the Legislature. Future legislators may feel more supportive of revenue measures if they knew that those dollars were going to go toward education funding,’ Hoffman said.

The contemporaneous stories in the Alaska Beacon and Alaska Current are to the same effect. 

As we have considered its impact, we have become concerned that, far from helping as some have suggested, the proposed amendment would actually undermine the achievement of a comprehensive long-term fiscal plan for the state, the holy grail claimed by many.

As the members of the Legislature’s 2021 Fiscal Policy Working Group (FPWG) concluded in their Final Report:

The FPWG believes the legislature must pass a comprehensive solution. FPWG members do not support addressing only one or two issues to the exclusion of others. The FPWG believes addressing these issues as a comprehensive solution solves not only a fiscal challenge but a political challenge as well.

Especially as it has evolved in recent years, education funding is a part of the state’s overall fiscal challenge. But it is far from the entirety of the challenge, and, in dollar terms, it is not even the largest.

As background, the following chart shows the fiscal future the state faces under current law.

The numbers at the top reflect projected unrestricted general fund (UGF) spending levels by fiscal year, starting with the Legislative Finance Division’s (LegFin) most recent (March 18, 2026) projection of Fiscal Year (FY) 2017, 2018, and 2019 levels. Using the FY2019 level as the base, projected spending is adjusted annually for inflation at 2.5% for the remainder of the period. 

The dark blue bar reflects the revenue levels from the state’s sources of “traditional revenue” projected over the period in the Department of Revenue’s (DOR) Spring 2025 Revenue Forecast (Spring RF). The gold bar reflects the portion of the Legislature’s annual statutory percent-of-market-value (POMV) draw from the Permanent Fund, as also derived from the Spring RF, designated under current law for the general fund (i.e., after deducting the annual Permanent Fund Dividend (PFD)). The portion designated under current law for the general fund is calculated using the projections included in the Alaska Permanent Fund Corporation’s (APFC) most recent (February 2026) monthly “Financial History & Projections” report.

The red bar represents the resulting gap, or deficit, between projected UGF spending and revenue. Put another way, it reflects the amount of the “fiscal challenge” facing the state over the next ten years, including the portion related to funding education. The gap grows roughly at the rate of inflation over the period.

For perspective, the gap alone represents nearly a third (32%) of total projected UGF spending over the period. Looking at other measures, it also represents roughly 4.9% of projected Alaska adjusted gross income and 3.0% of projected private-sector Alaska gross domestic product over the period.

The FPWG Final Report outlines several components that, it concludes, are required in fashioning a comprehensive solution to the state’s fiscal challenge, including constitutional certainty for a POMV-based PFD formula, a healthy capital budget, “new” revenues, budget reductions, and spending limit reform. The proposed amendment addresses only a fraction of those: a potential funding source for a portion of the budget and a potential means of “selling” new revenues politically.

In discussions, some have suggested that creating a dedicated fund for education spending is complementary to a comprehensive plan. They argue that there will always be state spending on education, and if creating the fund makes “selling” new revenues easier, the approach would at least help close the portion of the overall gap related to education spending. 

That is far from a compelling argument, however. It assumes that creating the fund would not lead to increased education spending in future years beyond its currently projected share of overall spending. It could easily, and if it did, its creation would divert a portion of the “new revenues” that otherwise might be used to meet the overall fiscal gap instead toward additional spending growth on education. While the public education lobby might find that an acceptable outcome, other parts of the budget likely would not, resulting in pressure to increase those segments as well, and, with that, raising overall spending levels even further.

Moreover, even if the creation of the fund did not fuel additional spending growth, it would still tilt the available budget options in favor of one budget segment over others. The FPWG recognized that reaching an overall, comprehensive solution would require not only “new” revenues, but also budget reductions and spending limits reform. If the capacity for “new” revenues were absorbed primarily, if not exclusively, by education, that would leave primarily, if not only, reductions and spending limits to address the remainder of the items now addressed in the annual budget, including the PFD. 

The adverse impact on these remaining budget categories could be significant.

Still others argue that the proposed amendment itself does nothing other than create a framework for future dedications, so why be concerned about it? The response to that, of course, is if the proposal doesn’t do anything, why make the effort to pass it?

The answer is that the proposed amendment does do something. If passed, it would allow future legislatures to constitutionally (and through that, permanently) dedicate funds to only one budget segment – benefiting only one subset of Alaskans – by a simple majority vote. 

Theoretically, constitutionally dedicated funds ultimately may play a role in the overall, comprehensive fiscal solution contemplated by the FPWG and others. But prioritizing one dedicated to public education, separate from the overall effort, is the legislative equivalent of the proverbial “putting the cart before the horse.” 

Alaska needs a comprehensive, not partial, fiscal solution. Allowing the education lobby to go its own way will likely materially reduce pressure to solve the overall problem. With a separate solution in hand, the education lobby will no longer be incentivized to help work toward an overall solution. Indeed, once they have that in hand, they may find some benefit to continued uncertainty in the remainder of the budget.

The FPWG was right: to solve both fiscal and political challenges, “the legislature must pass a comprehensive solution.” To achieve that, all of the state’s constituencies should remain fully engaged in working toward that goal until it is accomplished. Prioritizing the resolution of one budget segment over others may appeal to that segment, but it will not benefit the state as a whole.

Brad Keithley is the Managing Director of Alaskans for Sustainable Budgets, a project focused on developing and advocating for economically robust and durable state fiscal policies. You can follow the work of the project on its website, at @AK4SB on Twitter, on its Facebook page or by subscribing to its weekly podcast on Substack.